Perfect Breeding Ground (Pay attention when:)
Customers are not loyal anymore
Permanent new product releases
High Marketing expenditures
High R&D expenditures
Price Erosion
Position of the Established towards these customer:
The established always enjoy serving the upper end of the market. But these customers don’t necessarily want to be seen as the upper end of something, they want to be seen as special. This is where the economies-of-scale-based business model of the established reaches its limits.
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Bargain Customer
At the other end of the spectrum is the “Bargain Customer”. These customers are tighter than a duck’s bum.
If the price can be reduced, they’re ready to get their hands dirty to make it happen.
They’re okay with waiting in line and they accept bland design, as well as base-model products and services lacking features and functionalities, bells and whistles.
However, the quality of the core offering still needs to be good. They’re not ready to accept crap.
They don’t mind being considered bargain hunters. They regard themselves as being smarter than their peers who fall for the superficial promises of the premium brands. They read review magazines to make sure that they’re getting a good deal. Bargain Customers are quite immune to advertising. They’re aware that they’re the ones footing the bill for that flashy ad campaign, after all. The only advertising they’re interested in involve ads in which the everyday price is slashed and substituted with a remarkably lower one.
Perfect Breeding Ground (Pay attention when:)
Think about your digital camera, your laptop computer, the programs you use on your computer, any modern TV set, or the options available on GPS systems. For many customers, the bells and whistles are more of a curse than a blessing. And with every feature and option, the established are adding another layer of expensive complexity. Happy days for Bargain Nightmare Competitors.
Position of the Established towards these customer:
Traditional companies don’t tend to focus exclusively on Bargain Customers. It’s only when the established need to dump stock that these customers are welcomed for the contribution margin they can provide. Otherwise, the established prefer to service more upmarket customers.
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Choice Customer
Yet another kind of customer is the “Choice Customer”. This person is interested in transparency.
They want to see what types of product are available on the market, ideally on a worldwide basis.
They want to see how much stock is on hand or be informed about the availability of services.
Of course, they’re interested in price transparency, as well. Here, Choice Customers and Bargain Customers mingle.
Choice customers see the Internet as mankind’s greatest invention. It allows them to follow their passion. And the ubiquity of the Internet has led to them to the conviction that total transparency of all offerings and their respective prices are a fundamental right.
Perfect Breeding Ground (Pay attention when:)
To keep customers devoted, companies invest heavily in marketing. Powerful brands are created to refrain their customers from looking left or right. Loyalty programs are designed to retain customers even when a company is not able to provide the best offering. Nespresso and Apple demonstrate with their proprietary systems how beautiful it can be for companies to imprison customers within such a kind of microcosm. Taking these efforts into account, it’s easy to understand that there’s one thing the marketing geniuses in particular, and companies in general, can’t stand, and that’s when offers become comparable.
Position of the Established towards these customer:
The Choice Customer is completely outside the scope of the established, who try to make their lives as difficult as possible or at least attempt to seduce them so they don’t follow their basic instincts.
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Ultimate Want Customer
Ultimate Want Customers were never really happy with what the industry had to offer. Who wants insurance or who wants to see a doctor? However, the larger percentage of the Ultimate Want Customers are not aware of the offerings being work-arounds and fixes. But as soon as any Ultimate Want Customer gets closer to being offered a carefree life without insurance or health without doctors they understand that what they never previously questioned was actually not the best solution for them. Offered an alternative, these Ultimate Want Customers are gone in the blink of an eye. They ask themselves why it took so long for anybody to come up with such an alternative.
Perfect Breeding Ground (Pay attention when:)
Position of the Established towards these customer:
This type of customer is not outside the scope of the established. But when the customer discovers an alternative and becomes disloyal, it’s enormously difficult to win them back. Often, a totally different business model is required
Description of the Ultimate Want NC
Ultimate Want Nightmare Competitors provide attractive alternatives that make the offerings of the established look like work-arounds.
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Access Customer
The final type is the “Access Customer”, who is not yet even a customer. The industry isn’t aware of the possibility of a relationship or considers it beneath its dignity to serve such customers.
Perfect Breeding Ground (Pay attention when:)
Position of the Established towards these customer:
This type of customer is not outside the scope of the established. But when the customer discovers an alternative and becomes disloyal, it’s enormously difficult to win them back. Often, a totally different business model is required