Understanding overserved customers
Overserved customers are customers that are currently buying items that vastly sparse what they need. There may be features that are excess of requirements, with customers potentially paying substantial amounts for things that they do not necessarily need.
So why are customers buying them? Because there are some elements that the customers do need. They may not need all the extra features, but they still value the purchase, and there are no better options with a more minimal selection of features.
The opportunity of overserved customers
The key opportunity of overserved customers is that they may be willing to switch to a different product that has a more minimal line of features. Scrapping out the additional dimensions that overserved customers do not value, and offering the new product or service at a lower price point, may convince customers to make the switch to your product.
The danger of selling to overserved customers
The flip side is that if you are currently selling to overserved customers, there is a risk that another firm will come in and strip out features, to offer a more minimal product at a lower price point to overserved customers. While you may be able to extract out a higher price point from such customers, if there is a clear way of offering a more basic product without the excess features, then a stripped-down product offering may undercut your current products.