Three Tiers of Non-Customers
From Kim & Mauborgne's Blue Ocean Strategy, the Three Tiers of Non-Customers framework redirects attention from existing customers to the 90%+ of the market that doesn't buy your category. Tier 1: 'Soon-to-be' non-customers — people who buy minimally, looking to jump ship. Tier 2: 'Refusing' non-customers — people who consciously rejected your industry's offerings. Tier 3: 'Unexplored' non-customers — people in distant markets that no one in your industry has ever considered. The framework's thesis: the largest blue oceans are unlocked by finding the COMMONALITIES across all three tiers, then designing an offering that brings them ALL into the market simultaneously. Most companies focus only on Tier 1 (which produces marginal growth) and ignore the other two (which produce category creation).
The Trap
The trap is treating non-customers as a research topic rather than a design constraint. Teams interview non-customers, learn interesting things, then go build features for existing customers anyway because 'that's where the revenue is.' But the math of blue oceans depends on attracting non-customers en masse — if your roadmap doesn't materially address Tier 2 and Tier 3 barriers, you don't have a blue ocean strategy. The other trap is going after only one tier (e.g., Tier 1) which is essentially competitive churn, not market creation.
What to Do
For each tier, run a structured discovery: (1) Tier 1 — survey 50 minimal users about what they'd want to buy MORE of if pain points X/Y/Z were removed. (2) Tier 2 — interview 20 people who actively chose substitutes; ask 'what would have to be true for you to consider this category?' (3) Tier 3 — identify a market that has never been thought of as a potential buyer (e.g., children for adult products, rural for urban services); test if the underlying job-to-be-done exists. Look for COMMON barriers across all three tiers — those commonalities are your blue ocean targets.
In Practice
JCDecaux, the French outdoor advertising company, mapped non-customers in the 1960s. Tier 1: minimal billboard advertisers who were unhappy with high costs. Tier 2: retailers who refused billboards because of poor location targeting. Tier 3: businesses that had never considered outdoor advertising because they assumed it required mass-market budgets. JCDecaux's commonality across all three: lack of long-term, prime-location ad space at predictable economics. Their solution — providing free street furniture (bus shelters, kiosks) to municipalities in exchange for exclusive 8-15 year ad rights — addressed all three tiers simultaneously. Result: created the entire 'street furniture advertising' category and became a multi-billion-dollar global business.
Pro Tips
- 01
Don't research the three tiers in isolation. Run them in PARALLEL with the same interview guide. The goal isn't to understand each tier deeply — it's to find the 2-3 barriers that show up in ALL THREE. Those overlapping barriers are the blue ocean signal.
- 02
Tier 3 is the highest-leverage but the hardest to find. By definition, you're looking for buyers your industry has never considered. Use the question 'who in adjacent industries has the SAME job-to-be-done but solves it completely differently?' to surface Tier 3 candidates.
- 03
Beware false Tier 2 signals. 'I rejected the category because of X' is often rationalization — you need to observe BEHAVIOR (what they actually use instead) and test whether changing X would shift behavior. Stated reasons for rejection are wrong about 50% of the time.
Myth vs Reality
Myth
“Non-customer research is the same as TAM analysis”
Reality
TAM measures the SIZE of the addressable market assuming current category economics. Non-customer research questions the category economics themselves. TAM tells you how big the existing pie could be. Three Tiers tells you how to bake a different pie that's 5x bigger.
Myth
“Going after non-customers means abandoning current customers”
Reality
Done well, addressing common barriers across all three tiers also retains current customers because the changes that bring in non-customers (lower complexity, better access, simpler pricing) usually delight existing customers too. The exception: when current customers are buying the COMPLEXITY (e.g., enterprise IT buyers), in which case you may need to fork the offering.
Try it
Run the numbers.
Pressure-test the concept against your own knowledge — answer the challenge or try the live scenario.
Knowledge Check
A premium gym chain analyzes non-customers. Tier 1 (occasional members): cite cost as the issue. Tier 2 (refusers): cite intimidation and lack of guidance. Tier 3 (never-considered — seniors): cite physical accessibility concerns. What's the strongest blue ocean signal?
Industry benchmarks
Is your number good?
Calibrate against real-world tiers. Use these ranges as targets — not absolutes.
Non-Customer Market Size (Multiple of Current Customer Base)
Approximate ratios from Blue Ocean Strategy case research across consumer and B2B categoriesTier 1 (Soon-to-Be)
1-3x current base
Tier 2 (Refusing)
5-15x current base
Tier 3 (Unexplored)
10-50x current base
Combined Blue Ocean Potential
16-68x current base
Source: Kim & Mauborgne, Blue Ocean Strategy (2005)
Real-world cases
Companies that lived this.
Verified narratives with the numbers that prove (or break) the concept.
JCDecaux
1964-1980
JCDecaux mapped non-customers of the outdoor ad industry. Tier 1: low-volume billboard buyers frustrated with cost and rotation. Tier 2: local retailers who rejected billboards because of poor targeting and short lease terms. Tier 3: small businesses that never considered outdoor advertising at all because they assumed it required nationwide-brand budgets. The COMMON barrier: lack of access to long-term, prime-location ad space at small-business economics. Solution: install bus shelters, public toilets, and kiosks for free in cities, in exchange for exclusive 8-15 year ad rights. This made prime locations available with predictable, small-buyer economics.
Cities (Today)
3,800+ globally
Revenue (2023)
€3.6B
Category Created
Street furniture advertising
Tier 3 Conversion
~80% of new customers
JCDecaux didn't compete with Clear Channel for billboard customers. They created a new advertising category by addressing the COMMON barrier across all three tiers: access to prime locations on small-buyer economics.
Salesforce
1999-2003
Salesforce mapped CRM non-customers. Tier 1: SMBs paying for Siebel-lite tools they barely used. Tier 2: SMBs that rejected CRM after failed Siebel/Oracle implementations. Tier 3: solo professionals (real estate agents, financial advisors) who had never considered enterprise CRM at all. Common barrier across all tiers: complexity of installation and IT dependency. Solution: browser-based, no-software, credit-card sign-up. The 'No Software' branding addressed all three tiers' shared barrier.
Tier 1+2+3 Combined Market
~30x existing CRM market
Salesforce Revenue (2003)
$96M
Salesforce Revenue (2023)
$34.9B
Sign-up Time
Minutes vs months
Siebel won the existing CRM market and was destroyed by Salesforce serving the non-customers. The 90% you're not selling to is bigger than the 10% you are.
Decision scenario
Choosing Where to Hunt
You run product strategy at a $40M ARR project management SaaS. Growth has slowed to 8% YoY. The CEO wants you to identify the 'next $100M of growth.' You can chase Tier 1 (occasional users), Tier 2 (refusers), or Tier 3 (never-considered).
ARR
$40M
Growth Rate
8% (down from 30%)
Customers
12,000 teams
Existing Market Saturation
~70%
Decision 1
Your team has time/budget to deeply explore ONE tier in the next quarter. Tier 1 research suggests 'better notifications and integrations' will increase usage. Tier 2 research is unscoped. Tier 3 has been suggested by an analyst — 'what about non-knowledge-workers? Construction crews? Restaurant teams?' but no one has interviewed them.
Focus on Tier 1 — fast wins from the customers we already understand. Better notifications and integrations should lift usage and retention.Reveal
Run a parallel discovery sprint — interview Tier 2 refusers AND Tier 3 deskless workers. Look for COMMON barriers before committing.✓ OptimalReveal
Related concepts
Keep connecting.
The concepts that orbit this one — each one sharpens the others.
Beyond the concept
Turn Three Tiers of Non-Customers into a live operating decision.
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Turn Three Tiers of Non-Customers into a live operating decision.
Use Three Tiers of Non-Customers as the framing layer, then move into diagnostics or advisory if this maps directly to a current business bottleneck.