Implementing Innovation: Segment Your Non-Customers
October 1, 2013 Editor 0
Some of the most successful and disruptive innovations stem from a company’s ability to tap into demand from non-customers in its market category. The challenge, of course, is to identify why these people aren’t customers already. Once you know why potential customers aren’t buying your product, you can develop innovations to make your product more appealing to them.
Unfortunately, a focus on known customers and share of the existing market is ingrained in the processes and metrics of companies. As a result, they have less systematized data about their noncustomers. You can improve the odds on succeeding through innovation if you fix this data problem by treating non-customers as a segmentation problem and apply some of the discipline of marketing research.
The key is to segment according to reasons for not buying products in your category. In my experience, these typically fall into one of six categories:
- Economic: People lack access to cash or credit
- Functional: The product does not help people achieve what they want to achieve
- Educational: People don’t know how to use the product or even what it can do
- Access: People can’t buy the product because it is not readily available to them
- Social: The product doesn’t conform to religious or social norms
- Emotional: The product triggers negative emotions.
The global swimwear company Arena used this categorization as a framework for segmenting non-customers. They first hypothesized a list of non-swimmers, then they analyzed the barriers inhibiting the potential demand of each segment, and finally they developed a set of new products that could overcome some of these barriers.
One attractive segment they identified were beginners who went to the pool a few times and then gave up. The principal problem for this group was functional: they struggled to develop good breathing technique. Breathing is perhaps the biggest challenge for novice swimmers. Poor breathing creates problems with executing strokes, making it harder to move comfortably in the water. It is one of the most common reasons that novices give up learning to swim and turn to non-water gym activities.
This insight led Arena to develop a new device, called the Freestyle Breather, a pair of plastic “foils” or “fins” that can be attached to most marketed goggles. The Freestyle Breather has three main functions: it facilitates inhalation by enhancing the bow wave, making it easier to breathe into the air pocket; it secures inhalation by protecting the mouth and nose from splashes and water drops; and it reduces over-rotation of the head and body because swimmers feel less anxiety and risk of breathing water.
Swimming with a Freestyle Breather makes the pool experience so much easier for beginners that it has the potential to convert many novices into regulars at their local pool. Arena reckons that there’s potential to more than double the global population of regular swimmers.
Another segment Arena identified was Muslim females, who experience social barriers to swimming. They want to be able to move fluidly in the water but they can only swim when their body is fully covered. Unfortunately, swimming in traditional cotton bodysuits is uncomfortable both during the swim and after (cotton body suits take a long time to dry off). After studying groups of Muslim women using the traditional swimsuits, Arena applied its expertise in performance materials to design a line of swimwear that conformed to religious norms, was comfortable in the water, and dried quickly.
Of course, you won’t capture all your potential marketspace through this exercise. But if Arena’s experience is anything to go by, simply sorting non-customers into the categories described here and analyzing barriers blocking potential demand gets you a very long way. Companies should be doing more of it.
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