The Three Tiers Tool – Identifying your non customers

OK, so now you have created your PMS map and are realizing most of your products are in a great big bloody Red Ocean where you are constantly fighting off the competition in a shrinking pool of revenue and profit. You have created your strategy canvas, and have tested the competitive factors so you know just what factors the market makes decisions. Now what?

Well, this is the fun part. Looking at your strategy canvas and the competitive factors, there are four things you can do with competitive factors. You can eliminate them, reduce your investment or level of offering in them, raise your investment or level of offering in them, or create new ones. It is these actions or strategic moves taken by the CEO that helps to formulate the new blue ocean strategy.

The challenge is that these actions are not taken in a vacuum. Any action (or non action) must be supported by valid data. Where do you get this data? From the market place. You will have some surprises. Factors you and your staff are emotionally tied to may not have any interest at all from the customer point of view. In fact, they may be liabilities. These are the factors you will eliminate and stop investing resources in them.

What is critical here is what market place you decide to research. If you research only the current customer base in the industry, what are you doing? You are relegating yourself to the Red Ocean of bloody competition. I do recommend that you research your current market place. However, you must go to the non customers. There are usually tiers of non customers.

So let’s look at a tool called the Three Tiers. In the center is your red ocean market. So if we use the electronic game industry as an example, young antisocial males would be at the heart of the red ocean market. They are the primary players of electronic games.

Moving away from them, the first tier would be males that have outgrown that stage of their life and may still play games, but are looking for something else. When they find it, they will bolt away from these games. This first tier is followed by girls, who know about games, can play the games, but don’t want to. They reject the games in favor of more social activities. So girls are the second tier of non customers. The third tier of non customers is probably everyone else, seniors, families, elderly. See the Three Tiers example below:

To receive a copy of the Three Tiers instructions, email me at with your name, company and contact information.

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Posted by Dr. Sarah Layton in Blue Ocean Strategy, Growth, Strategic Planning on June 24, 2009.

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