Think of Non-Customers First If You Want to Grow

by Lloyd MelnickFebruary 19, 2019April 11, 2020

I have been a consistent advocate of Blue Ocean strategy for years and a blog post by the Blue Ocean Team shows how you can grow your business by focusing on non-customers. Rather than fighting with your competitors to split up the existing pie, by thinking about non-customers you have greater growth potential. The blog post shows three types of non-customers and by understanding them you can tailor your product, new products or marketing to meet their needs. Below are the three groups of non-customers and my thoughts on their relevance to the social casino industry.

Non-customers who occasionally purchase or play

The first group of non-customers who represent a potential market are those who sit on the edge of the market, they purchase minimally your industry’s offerings but are always looking and quick to move to an alternative. The Blue Ocean Team uses the Pret A Manger chainas an example, as they appealed to people who reluctantly bought fast food but were looking for an alternative.

The social casino ecosystem includes many of these non-customers. These include gamers who are ready to skip to another genre (hypercasual, match-3, etc) if they see an appealing ad or the 90 plus percent of players who will play but not monetize. There are first-tier noncustomers waiting to be swayed in every industry.

Non-customers who refuse to become customers

The second group of non-customers is people who know an industry exists but have rejected it. As the Blue Ocean Team writes, “they have consciously thought about and considered your offering and then rejected it. It might be because another offering meets their needs better, or it could be that they simply can’t afford your offering. A second-tier noncustomer will compare your offering with another offering, weighing the pros and cons of each….The fact that second-tier noncustomers considered your industry means that you are far closer to possibly capturing them than you realize. So you need to find out why second-tier noncustomers refuse to use the products or services of your industry.”

In the social casino space, there are three types of these non-customers. The first is real money casino players (either land based or online) who have decided to not to play a free to play offering. They could have passed because they are only playing for economic reasons or the games offered are not what they prefer. The second is male casino players who may have rejected social casino because they consider them too “pink.” The third group is people who have tried social slot games but did not like the slot mechanic.

Non-customers who have not considered your industry

This category of non-customers has never considered your industry as an option. These non-customers have not been targeted ever by any company in your industry. This group is important to consider as it represents the largest potential market to penetrate (by definition it is everyone else). Existing companies in your industry assume these peoples needs are satisfied better by other industries.

In the social casino space, these are people who do not know or care that social slots games exist. It can be gamblers, gamers (other genres) or even people who have not played a mobile game.

What non-customers mean for social casino

Non-customers are particularly important to social casino as the ecosystem has been growing consistently but through better monetization rather than an increase in customers. If the industry is going to continue growing or if you want to gain market share, appealing to non-customers is the best option. First, you can tailor a product appeal to people who play but do not monetize or play rarely. Second, you can build a product for people who have churned, tried social casino games but left. Finally, you can build a social casino product for people who the industry has never targeted.

While the successful companies will come up with concepts internally and not rely on this blog to provide the answers, the key will be creating social casino products that do not simply replicate the existing games. That means looking at mechanics other than slots. Is also means creating an environment that is not targeting 40+ women. To successfully turn non-customers into customers, the parameters of the products also must shift.

Key takeaways

While many companies look at their competitors and try to grow by building a better product for existing customers, the biggest opportunity exists in appealing to non-customers.
There are three types of non-customers: those who occasionally purchase or play, those who have rejected the current offerings and those who have not considered your industry.
If social casino is going to continue growing or if you want to gain market share, appealing to non-customers is the best option. First, you can tailor a product appeal to people who play but do not monetize or play rarely. Second, you can build a product for people who have churned, tried social casino games but left. Finally, you can build a social casino product for people who the industry has never targeted.

Becoming truly customer-centric and personalized

by Lloyd MelnickFebruary 13, 2018January 14, 2018

Focusing and organizing your company around the customer, not functions or products, is the only way to become truly customer-centric. While loyalty and rewards programs are a great tool to increase engagement, they are only one part of becoming customer-centric. Not only does David Norton’s The High Roller Experienceprovide a roadmap for building a strong loyalty program, it also shows how Harrah’s/Caesar’s casino group created a truly customer-centric company.

Put the customer at the center

By definition, to be customer-centric, you need to put the customer at the center of your company. The leadership of most businesses build their organization around product line, business unit, or geography, which makes it quite difficult to take a customer-centric approach to running the company. The customer becomes a by-product of the organization’s design rather than the core around which the company revolves. As Norton writes, “customer centricity means that the customer is the company’s and not an individual business unit’s. It is an ability to interact with the customer cohesively and consistently regardless of which business unit the customer is dealing with.”

You also need to put the customer at the center of your data. Norton writes, “being able to truly understand the customer and present relevant content at the right moment through the right channel is the holy grail for which companies should strive in order to engender deep loyalty from customers. Data and technology can enhance the customer experience while simultaneously driving incremental profits for the company. “

To achieve this convergence of data and technology, you should build cross-functional task forces that include analytics, technology and the various functions that interact with the customer. These teams can then derive how to understand the individual customer behavior and integrate the results at each touch point so the customer gets the optimal experience for them.

It is more than loyalty

Being customer-centric is much more than loyalty. While Norton created Total Rewards, Harrah’s incredibly successful loyalty program, he writes, “loyalty is about understanding your customers in detail and interacting with them in a highly personalized way at every point of contact with your brand.” Loyalty is about more than a rewards program where customers are fixated on point accumulation and the company is primarily concerned about the cost of contingent liability. It is about interacting with the customer across their entire journey, at every interaction with your company.

It cannot be product specific

As mentioned earlier, you cannot be customer centric if you are focused on product lines or types. You need to look at the customer across all of your products. This focus also then allows you to help the customer find the products and experiences that are most likely to resonate with them.

Looking at the customer across products also enhances the lifetime value of the customer to the company. If you set up your data and organization around the customer and not product, you can predict who of the low-value masses has the potential to shop across products, largely by looking at demographic and behavioral factors. You can then target these customers so as not to confuse the individual product positioning in mass advertising.

Put the customer at the center

With customer now expecting a personalized and great experience, and getting it from the top companies (Netflix, Amazon, etc), you need to move from a 20th century company to a customer centric company. Blow up your organization and structure it around the user. Build your analytics and business intelligence so it tracks the customer journey and allows you to touch every player individually the right way at the right time. When you build your company around the customer, you build it to succeed.

Key takeaways

Being a customer centric organization is much more than having a great loyalty program.
You need to structure your organization around the customer, not along product lines or geography or channels.
Your data also needs to be customer centric, understanding the customer at all points of their journey and ensuring that it then feeds this data back to given the customer the best personal experience for them.

Why you should not focus just on existing players or customers

by Lloyd MelnickJuly 8, 2015May 1, 2021

Many companies, especially game companies, build out their products based on how early customers like the product but this approach can inhibit growth. An article in the Harvard Business Review, “Focus On the Customers You Want, Not the Ones You Have” by JP Eggers, shows that the hard part in creating a successful product or game is not appealing to users early but sustaining.

The problem with early users

Early players are by definition early adapters. They probably have a higher preference for innovation and are more likely to take risks. They may have different ways of making decisions, including whether they monetize in a game, if they invite friends or if they come back. An early player may be very enthusiastic and tell friends but then go on to the next shiny object, so basing decision on their play would suggest you should focus on getting them to bring in as many users as possible before they leave.

Companies run into problems if they base product decisions on these early adopters, which is often the case. Eggers also points to research that shows early adopters are different. According to Eggers, “early adopters are typically younger, more willing to take risks, more eager to try new things, more affluent, and substantially less numerous … First, what worked with early adopters isn’t likely to work with later adopters. In launching new products or services, start-ups tend to accumulate deep knowledge about customers at the leading edge of a technology. But that knowledge doesn’t necessarily apply to other consumer groups; that’s one reason so many new firms struggle to create second rounds of offerings. To be successful, companies need to innovate for the consumers they want, not the ones they have.”

Another issue comes up because early adopters do not want to see the product expand to the mass market. A chess app may appeal strongly to grandmasters but if it becomes something the mass-market plays, the grandmasters may no longer want to use the product. Similarly, Facebook lost some of their young users when their parents started using it, but there were hundreds of millions more adults than teens. Although it worked for Facebook, the influx of users so alienated the early users of MySpace, you may no longer even remember MySpace.

A solution

There are several strategies to combat the problem of having a product that either is not attractive to new users or alienates existing users:

Innovate for future users. Build features and new content so it appeals to new users, what people not currently using your product would want.
Engage early adopters. By engaging your customers, you ensure they feel connected to the product. Letting them have a voice, even if you cannot always listen to it, keeps them engaged and likely to cope with changes they do not consider ideal.

The key is understanding that what appealed to your first users, and their behavior, is not necessarily what will drive your growth.

Key Takeaways

Early users will not have the same preferences and consumption patterns as customers you attract later in the product’s life cycle.
If you slavishly build features and new content for existing users, it may not appeal to new users.
The key is to innovate for new users while keeping your early adopters engaged so will tolerate the changes to the product.

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The Business of Social Games and Casino

How to succeed in the mobile game space by Lloyd Melnick

customers

Non-customers who occasionally purchase or play

Non-customers who refuse to become customers

Non-customers who have not considered your industry

What non-customers mean for social casino

Key takeaways

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Put the customer at the center

It is more than loyalty

It cannot be product specific

Put the customer at the center

Key takeaways

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The problem with early users

A solution

Key Takeaways

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