I’m a firm believer in being aware of major trends, not only does this make you invaluable to your prospects and clients, but it also keeps you informed so you can spot opportunities, pivot and win.Looking at the bigger picture gives you space to look for a sea of untapped customers you can give value. Click To Tweet
Knowing how to find and seize new customers without a competitor in sight, will help you stand out from the crowd, prepare you for what’s coming, and protect the long-term health of your business.
To help you prepare, I thought I’d share some insight I gleaned from one of the most remarkable business strategy books I’ve ever read (as a graduate student of strategy & innovation, I’ve read a few) Blue Ocean Shift, Beyond Competing – Proven Steps to Inspire Confidence and Seize New Growth
The biggest AHA for me in reading this Blue Ocean Shift was, when it comes to spotting new strategic opportunities, one of the biggest mistakes businesses make is being customer focussed.When it comes to spotting new strategic opportunities, one of the biggest mistakes businesses make is being customer focussed. Click To Tweet
I know! Keep reading.
If you focus on servicing existing customers in a given market, you end up competing on making them happy, fighting for market-share, competing on price. Plus, you don’t really innovate, because you’re focussed on making existing customers happy, not spotting new opportunities.
Discovering calmer seas of opportunity
The Blue Ocean strategy approach is all about targeting non-customers by innovating value. For example, instead of making wine for people who already buy wine, market wine to people who buy beer. Or, instead of selling software systems to corporate purchasing departments, market directly to the people who use it as Bloomberg and Salesforce did. Instead of fighting and elbowing in the muddy waters with competitors, the Blue Ocean approach steers you into the calmer seas of untapped customers waiting to fall in love with your offering.
Blue Ocean Shift is filled with delicious case studies, practical strategies and mind-blowing insight. This book is a must-have for every entrepreneur. I believe the best path to innovation and creativity is asking new or better questions; by asking different questions you can explore uncharted territories of people to serve and this book is filled with tools, strategies and templates helping you do just that. Below you’ll find a summary of one of the tools, giving you six paths to finding new customers.Blue Ocean Shift is filled with delicious case studies, practical strategies and mind-blowing insight. This book is a must-have for every entrepreneur. Click To Tweet
6 Paths to finding new customers, without a competitor in sight
Where the grass is greener
Instead of focussing on your rival’s industry, where you’ll probably look and sound like everyone else, look across alternative industries. Recognise the pain points your offering solves and brainstorm a list of other industries people use to address the problem or satisfy a need. For example, the cinema satisfies the need for a date night or entertainment. What else do people do to get their fix? Go out for dinner? Netflix? Drinks at the local? As a customer, where else would you look?
This is not about looking at others in your industry but looking at alternative industries. When you’ve identified alternatives, ask yourself “why do customers pick this and not that?” If possible, ask a consumer of the other industry, because then you’ll get an answer that cuts through your assumptions and biases. This isn’t about what differentiates an industry, it’s about why customers would go to the pub for dinner instead of having a TV-dinner, and identifying a gap in value offered, that’s missing in your industry.
TV-dinners and ready-made meals used to be rather basic like frozen pizza or pies. Home meals were downright nasty. Marks & Spencer’s Food (a slightly higher end supermarket) created superior quality, ready-made meals with luxurious packaging to capture a new market of customers who were willing to pay £10 to £20 for a meal out.
What alternative industries solve the same problem for buyers as yours? And why do customers buy there and not in your industry?
Sliced Bread and Baguettes
Instead of focussing on carving and refining your competitive position in your given market cluster, look across other strategic groups within your industry. For example, in a supermarket, you have the fruits, vegetables, bakery, household cleaning and so on, these would be the equivalent of “industries”. Whereas sliced bread, baguettes and pittas would be like strategic groups within the industry baked goods. This might sound like the previous example, but not quite. A case study mentioned in the book comes from the hotel industry, where hotels typically compete with hotels of similar star-ratings.
Along comes CitizenM with their affordable luxury hotels. The CEO and Co-Founder, Rattan Chadha and his team asked the question, “Why do you choose a five-star hotel over a three-star hotel? For the price?” Digging further into this question, they realised all the bells and whistles that come with a luxury five-star hotel are redundant. Google practically replaces the concierge; the front desk can often be slow; rooms the size of football fields are wasteful because you don’t spend that long in them; bellhops take too long to bring your luggage, and if you travel light, which most business travellers do, you don’t really need them.
Chadha and his team discovered the decisive factor determining decisions to go upscale was the luxurious experience, the feeling of beauty and quality. When they asked why one might go three-star instead of five-star, price was the loudest reason followed by the off-putting snootiness, formality and not being relaxed enough. By eliminating all the unwanted bells and whistles of a five-star hotel, CitizenM delivers the desired luxury experience at an affordable price.
What are the strategic groups in your industry? And why do customers trade-up or down each group?
Instead of focussing on the common buyer profile served by your industry, look at the people along the chain buying the offering. There’s a fab example of Philips lighting where competitors typically targeted the corporate purchasing department. Philips identified the CFO as another buyer in the chain, and when they interviewed him, they learned the actual price of the fluorescent light was a tiny fraction of the total cost of ownership.
Lighting was high in mercury content, so they couldn’t just dump it in the kitchen bin afterwards. Disposal cost more than buying the lighting, but the purchasing department didn’t see this, the CFO did. Philips created a new environmentally friendly bulb eliminating 100% of the disposal cost; it was more expensive than competitors, but the total cost of ownership was significantly less. Philips then pitched this to the CFO instead of the purchasing department because all they’d see was the initial cost.
Who are the main buyers your target industry currently focuses on? Who else is involved up and down the chain of command when making a purchasing decision?
Do you want fries with that?Watch what users do before during and after using your offering and it will give you a clue as to how you can add more value. Click To Tweet
A fab example is another great find by Phillips, this time the kettle. They watched people in their homes using a kettle. Have you ever had to fish out limescale flakes from your tea? Yeah, it’s gross. The kettle-making industry didn’t think the limescale was their problem; it was the water supplier’s problem. Along came a new Philips kettle with limescale removers! Not only did they increase the price point, due to added value, the limescale remover created a new revenue stream.
Virgin Trains are another notable example and have created new service value in many ways. Two days in a row I took the train up north, travelling on two different providers. Friday with GWR (Great Western), Saturday with Virgin. The difference in how I felt with both is worthy of mention. Just look at the series of emails I received.
Notice the Virgin emails on the right, how conversational they are? Feels like someone on the other end sending you that note. It feels more personal. The ones on the left feels like a robot sent them. Also notice, on the left, I had to send myself a reminder because I wanted to make sure it was there when I needed it. The reminder didn’t arrive until later, past my email checking time.
Oh, and this image below is tiny thing, but for me, it was invaluable. I get lost easily, even with Google Maps.
What do your buyers actually do before and after buying your offering? You have to watch them to find opportunities as opposed to asking them. When Philips asked what people do when making a cuppa, nobody mentioned fishing out limescale.
Flip the Practical-Emotional Positioning
To gain competitive advantage an industry commonly looks to improving performance or price. But there’s a deeper perspective that uncovers a gem of opportunity. Think about the practical and emotional association with what you offer. Luxury high-end fashion is emotional, exclusive, elite. WHSmith (a major newsagent) is convenient.
Or take my example – what comes to mind when you think of sales or salespeople? Aggressive? Extrovert? Wolf of Wall Street? An aggressive approach might work with large sales forces where the pool of customers are similar sorts of personas, but it’s quite intimidating for non-sales people. That’s not me and most certainly not you. To change the emotional appeal, it made sense for me to create mindful selling and growing your sales, mindfully. It’s something that aligns with who I am, but more importantly, it aligns with people like you.
Ask yourself, how do non-customers feel about your industry, what’s their perception? Asking them is the best way, in an informal chat. Then explore what your offering might look like if you flipped its positioning.
Ride the Tsunami
The prevailing thinking is to adapt to external trends as they happen. The Blue Ocean way is to shape trends impacting your target industry. That sounds gargantuan, doesn’t it?
A start-up I coached, operates in the care industry. As you found out earlier, one of the biggest irreversible trends is Baby Boomers retiring, and it will continue in a massive way, creating a massive opportunity for KareInn to shape the care industry. The Care industry is technically laggard, the tech-startup are leading the way to position themselves as a key partner to help providers of care services use technology to deliver a leap in value.
On the flip side of this trend, baby boomers business owners are selling their businesses in record numbers and winding down their businesses; in the UK, this could leave a population three times the size of London without a job in the coming decade. How will this trend affect your offering?
What big irreversible trends are shaping your industry? Think demographics, political, economic, environment, policy, regulation, etc.
“If this trend were taken to its logical conclusion, how would it impact the value we can deliver to buyers?”
For your business to flourish, first you must flourish
What makes or breaks your business is not your service or product, it’s you. Facebook’s recent disaster is not the product or service, it’s the leadership’s attitude to protecting your privacy. ZipCar exploded after someone decided to simply serve a smaller, specific location.The more you work on yourself, the better prepared you are to ride steady in storms and steer your business to calmer seas of new opportunities. Click To Tweet
The two most important things for you to deal with in your business is innovation and getting new customers. Get this book to help you keep innovating.