HomeBusiness DigestThe Human Capital Telescope: The art of courting non-customers

Major Facelift for Upper City Hotel

Clayton (Clay) Christensen has awakened us to the idea that the unit of analysis of the market is the job-to-be-done and not the customer. Theodore (Ted) Levitt would tell you that customers buy quarter-inch holes and not quarter-inch drill bits. If someone could show them a better way of getting quarter-inch holes without using drills, they would dump quarter-inch drills. Ted would tell you people buy news and not newspapers.

 

News does not have to be in a paper to be news. That has serious strategic implications. Clay would say people hire a newspaper to do a specific job such as minimising the risk of ignorance.

When Zimbabwean entrepreneurs begin to understand the ‘jobs’ non-consumers need done and group non-consumers around specific jobs-to-be-done, their chances of introducing targeted game-changing value-innovations are enhanced. It is value-innovation and not product and service- tweaking that appeal to non-consumers.

Types of non-consumers

According to Kim Chan and Renee Mauborgne, jointly ranked second in the biennial Thinkers50 list of business and management thinkers for 2011 there are three types of non-customers that value innovation can potentially bring on board.

The first tier of non-customers comprises those sitting at the edge of the market.   These purchase your products and services on very rare occasions. They make grudge purchases. For instance, they may have a sim card from a telephone network that they use on rare occasions. These are ready to become repeat customers if they are offered a leap in value.

The second tier of non-customers is what may be termed the conscious non-customers. The conscious non-customers refuse to buy your industry’s offerings though they see them as fulfilling their needs. Put bluntly, your industry is a put off to them. A good example is the de-banked customer who was once a client of our Zimbabwean banks.

The third tier of non-customers comprises those that are not psychologically in your market space. They have never considered your products and services as addressing their needs. A typical example is the unbanked customer who has never used the formal banking system.

Value-innovation levers

To turn non-customers into customers, there are at least 36 value-innovation options or levers you can pull (Mauborgne and Chan Kim). To understand these 36 possibilities, it helps to think of six types of buyer utilities and six stages of the buyer experience cycle. Regardless of the economic environment, consumers want a service or product that addresses any or the combination of six primary concerns, which you must convert into thoughtful questions.

First, can we design an offering that improves the potential customer’s productivity? Put simply, does your potential offering save time and resources for the potential customer? In our fast-paced world where time is increasingly becoming a scarce resource, firms that thoughtfully leverage on this concern can convert the legion of non-customers into loyal customers. Verimark Stores in South Africa has scored major success in this area. It has products that improve the productivity of women in the home—an integrated device that peels and chops vegetables effortlessly, for instance. This enables the hardworking, multi-tasking woman who is hard-pressed for time to stretch her time and financial budget. By meeting such needs, one is not only assured of a loyal customer but an evangelist for their product.

Second, can we come up with an offering that engenders simplicity? In other words, does engagement or interaction with your potential offering entail intuition-based use, comprise few and easy- to- follow steps?  Capitec Bank has successfully pulled this lever to court the unbanked and under-banked in South Africa. Belatedly, the big four banks in South Africa are also trying to pull this lever to counter Capitec Bank.  Apple’s products are built on a simplicity-for-the-customer philosophy.

Third, can our potential offering bring convenience? Does it allow people to assume control of the timing and location of accessing your offering? Can your offering afford people several options to access it? Zimbabwe Telecommunications’ new player, Broadacom, is pulling this lever. Broadacom has introduced a mobile Voice over Internet Protocol (VoIP) phone which one can carry with them. This is in contrast with other VoIP providers who are offering IPX-based phones which are not very different from fixed phones, as mobility is confined to the premises. The same phone device Broadacom is offering also allows connection to the internet.  Grudge users of fixed telephones may be wooed.

Fourth, can our potential offering minimise risks to our potential customers? Does it help them preserve their reputation? Does it ensure that physical harm is avoided? Does it minimise unplanned personal economic losses? The lever of risk minimisation was the key source of intrinsic value customers got from banks. The very idiom that you can ‘bank on something or someone’ is a clear testimony to the depth of entrenchment of the intrinsic value of safety that banks had managed to burn into customers’ mental space.

 

In the case of Zimbabwe, customers did not unbank their monies. They unbanked their belief in the competence of banks to minimise their risk of economic losses. We have three types of ‘banking vegetarians’ in Zimbabwe: The de-banked, under-banked and unbanked. Banks in this country  may need to rent reputation from organisations that ‘banking vegetarians’ still trust.This they can do by partnering with ‘surrogates of bankingness’, ie, organisations that command trust from the unbanked. I am not giving away any clues.

Fifth, can our potential offering promote fun and resonate with the image our potential customers want to align with? We live a highly charged and stress-loaded world, where there is an unceasing stream of bad news, increasing fear and hopelessness.  People are desperate to steal away from all this negativity. They need to laugh, enjoy, have fun, find relief, escape, improve their self-image, and associate themselves with good causes. If your offering aligns with these 21st Century needs, your chances of building a band of product or service followers are high.

 

Coca Cola pulls the fun and image lever to brand its products. The Coca Cola brand is built on the promise of helping the buyer experience happiness and adventure while consuming Coca Cola products.  That’s why Coca Cola (South Africa) engaged the kings and queens of the laugh-craft to conduct the reality show “So you think you are funny?” to promote the Fanta brand.

Sixth, can our offering be regarded as environmentally-friendly and socially responsible? People are beginning to take issues of climate change and social responsibility seriously. Environmentalism and social responsibility activism is no longer a fringe movement of loud rabble-rousing doomsters that they were once thought to be. These movements have become the paragon and conscience of the post-modern 21st Century world faced with unprecedented climatic and socioeconomic variances. Offerings that are perceived to take from society and the environment and leave the world environmentally poorer and society emotionally-drained are beginning to face consumer sanctions. Some Zimbabwean entrepreneurs are pulling this lever to offer traditional foods and delicacies.

Each customer can potentially go through six phases of the buyer experience cycle with your product or service. The entry point to the buyer’s experience cycle is the point of purchase. Second is the delivery stage (from provider to the consumer) stage. Third is the use stage. Fourth are supplements. Fifth is maintenance. Sixth and last is the exit point, ie, the disposal stage. Asking yourself each of the six sets of foregoing value-scanning questions at each point of the buyer experience cycle will offer you countless unique opportunities to create a serious leap in customer value.

 

Broadacom, for instance, appear to have strategically thought about the third stage of the buyer cycle to create differentiation—their VoIP phone comes as a ready-to-use gadget, obviating installation costs.  On the minus side, there is a maintenance challenge as their VoIP phone has a battery to be recharged.

The tendency is to focus on one stage of the buyer experience cycle. That has to change if we are to deepen innovation to woo non-consumers. It’s an art.

Chulu is a management consultant and business strategist. Let’s discuss at brettchulu@consultant.com.

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