Retail | Voice of the Non-Customer | John Gurd
If you’re as long in the tooth as Market Measures is (38 this year), you too might remember when the Voice of the Customer (VoC) first became a thing. We believe now is the time to welcome in the Voice of the Non-Customer (VoNC).
Sticking with VoC for just a moment, there are various opinions on how it all began, but we think the late 1980’s SERVQUAL model is a good place as any to start. The customer-centric VoC approach directly used customer expectations and feedback to make improvements to service quality. Expensive and costly at the time, forward-thinking organisations chose to actively invest in building up an ongoing Voice of the Customer programme.
Their aim? To truly understand what customers really wanted, expected and appreciated. To find out what motivated them to buy, what drove them to repeat purchases and what led to them becoming loyal advocates of the brand. To ultimately use this understanding to gain a strategic, competitive advantage.
But now we’re asking – what about the Voice of the Non-Customer?
Voice of the Non-Customer: the next big thing in retail
If we perceive a company’s competitiveness as closely linked to its capacity to innovate, upgrade and improve, it’s clear to see how and why the Voice of the Non-Customer (VoNC) is becoming the next growth area for a strategically thinking marketing/insights team.
Understanding your Non-Customers is not an easy task
It would be unrealistic to think that building up an understanding of your Non-Customers will be a standalone insight project. It won’t be. In precisely the same way the first VoC programmes took time, energy and commitment to create, you’ll want to take a longer-term strategic view of your Non-Customer understanding to reap the real benefits.
The good news is that modern research tools and methodologies are far more established and cost-effective than they were in the ‘80s. The less-good news is that Non-Customers are not easy to find. This latter point partly explains why the Voice of the Non-Customer is an ideal place to start building a further competitive advantage – because only a handful of the most forward-thinking organisations are fully embracing this approach right now. There is real opportunity here.
Download Voice of the Non-Customer explainer and case study PDF
The starting point: define your own Non-Customers
So, who are they? The definition of Non-Customers can be as broad as it is long, and is ideally tailored to each company’s own market strategy.
As you’ll know, marketing teams segment their customers in lots of different ways – demographically, psychographically, geographically, technograpically, behaviourally – on spend, on frequency, on loyalty…
And so you can segment, or define, your Non-Customers in very different ways too. Looking purely at those who are absolute Non-Customers will (by definition) be self-limiting – and would likely exclude your most significant new market and revenue opportunities. To get thinking slightly differently, here are some Non-Customer descriptions we’ve found helpful to use as a starting point over the years. Some will be very familiar, others less so. We’ve purposefully used plain English to help keep a connection to the simple, human barriers to purchase which can create your Non-Customer groups.
- The out of market – self-explanatory, “I don’t need a hearing aid…”
- The non-considerers – “Nope, I’m not going there because…”
- The unaware – “Who?”
- The lapsed – “I used to go, but…”
- The curious – “I’ve thought about going, but…”
- The reluctant – “I probably won’t, because….”
- The unhappy – “I went there once/recently, but…”
- The hard-to-find – ? Your biggest challenge ?
- The empty-hander – “I tried to buy X, but…”
- The misunderstood – “They never/they don’t ….”
- The misinformed – “Oh! I thought they did/sold …”
- The unhappy – “I went there once/recently, BUT …”
- The least and less-loyal – Typically supersets of the above
If you’re ready to start, you might use these groupings to consider how you will build up, over time, a rich dataset and deep understanding of the different perceptions, barriers to purchase, drivers and motivations of some or all of these segments.
Quantifying your Non-Customer opportunity: where the magic happens
Imagine this scenario.
You’re a retailer on the high street opening new stores at a fast rate. Imagine Grapetree Ventures, or similar, in the health-food sector. (According to Grape Tree – in the 10 years since Midland’s entrepreneur Nick Shutts opened his first Grape Tree store, the health and wellness chain has opened a new store on average every two weeks. That’s quite some rate.)
You’re seeing high variation in performance and sales conversion rates even after stores have typically bedded in. You’ve acquired some solid customer data but this hasn’t helped you understand what is happening in lower-performing areas. Across all your stores, you’d also like to fast-track what you know is a significant ‘curious considerer (non-customer)’ segment into their first three purchases and need to deeply understand their existing drivers and barriers to purchase to do this.
Here’s what you could do, from a Voice of the Non-Customer perspective:
- Use your existing customer insight to provide the information needed to identify the most likely gaps and assumptions and direct the overall piece of work.
- Use a mixed-methodology approach – focused on the Voice of the Non-Customer – to measure a range of metrics including: footfall, brand awareness and consideration, store experience, purchase behaviours and purchase conversion rates. In particular these can be compared between higher and lower performing stores.
- Identify the multiple different purchase barriers across different Non-Customer segments.
- Apply an econometric model to calculate the Opportunity Value (OV) for each barrier to purchase. This gives you a clear ££ figure, showing the potential sales or revenue increase if a specific barrier is removed and a targeted group of non-customers is successfully converted.
- Combine all your Opportunity Values into an easy to view Conversion Funnel. A critical tool for wider management planning, this highlights the relative value of each opportunity and paves a clearer route for decision making around which purchase barriers the business could and should tackle, in which order, and why.
Of course, some barriers to purchase and customer acquisition will be far easier to solve than others.
Stock and customer service issues may be straightforward for an operations team to address, but low rates of awareness and poor perceptions of quality may need extended operational, marketing and communications support.
By using our Conversion Funnel, the financial value of missed opportunities is clearly displayed, making it evident which problems should be tackled first and the ROI each can deliver.
Since 2016, we’ve worked on Voice of the Non-Customer projects and programmes alongside our major retail clients. As years progressed and they began to reap greater benefits, we forged a more and more systematic approach – in particular creating our unique Voice of the Non-Customer Conversion Funnel model to quantify Non-Customer market opportunities in ££ sales.