How do you identify and analyze the noncustomers of your industry for blue ocean opportunities?

1 What are noncustomers?

Noncustomers are people who are not buying or using your industry's products or services, either because they are unaware, unwilling, or unable to do so. They are not the same as competitors' customers, who are already in your industry and have made a choice among existing alternatives. Noncustomers are potential customers who are outside your industry boundaries and have different reasons for not participating in it.

2 Why are noncustomers important?

Noncustomers are important because they represent untapped demand and growth potential for your industry. By understanding why they are not buying or using your industry's offerings, you can discover new ways to create value for them and differentiate yourself from the competition. You can also reduce the risk of disruption by anticipating and addressing the unmet needs and expectations of noncustomers before they find or create a better solution.

3 How to identify noncustomers?

To identify noncustomers, you need to look beyond your current market and segment them according to their degree of distance from your industry. The blue ocean strategy framework suggests three tiers of noncustomers; first-tier noncustomers who are on the edge of your market, second-tier noncustomers who consciously reject it, and third-tier noncustomers who are farthest from it. First-tier noncustomers are the easiest to reach and convert as they are already familiar with your industry, while second-tier noncustomers require more effort to attract and persuade due to their clear reason for not participating in your industry. Third-tier noncustomers are the most difficult to reach and serve as they have no connection or relevance to your industry.

4 How to analyze noncustomers?

To analyze noncustomers, you need to understand their motivations, barriers, and trade-offs for not buying or using your industry's products or services. You can use various tools and methods to collect and analyze data from noncustomers, such as surveys, interviews, observations, experiments, personas, empathy maps, jobs-to-be-done, value curves, etc. The goal is to identify the commonalities and patterns among noncustomers that reveal their latent or explicit needs, wants, fears, and aspirations.

5 How to create value for noncustomers?

To create value for noncustomers, you need to design a value proposition that appeals to them and addresses their pain points and gain points. The blue ocean strategy canvas can be used to compare your value proposition with the industry's and identify factors that can be eliminated, reduced, raised, or created to differentiate yourself and offer a superior solution. Additionally, the four actions framework can help you create value for noncustomers by asking four questions: what factors can be eliminated, reduced below the industry standard, raised above the industry standard, and created that have never been offered before?

6 How to test and validate your value proposition for noncustomers?

To test and validate your value proposition for noncustomers, you need to build a minimum viable product (MVP) that demonstrates the core benefits and features of your solution and get feedback from noncustomers. You can use various methods to test and validate your MVP, such as landing pages, prototypes, pilots, experiments, etc. The goal is to measure the response and behavior of noncustomers and learn from their feedback to iterate and improve your solution.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?