This is a classic dilemma that many entrepreneurs(especially the offline one’s) are likely to run into. Customers as we all know come in all shapes and sizes(and mindsets). While there will be some customers who will talk nicely to you and your employees, pay their bills on time and offer you a piece of advice or feedback whenever needed, there’s also a bunch of customers that’ll act as if they are doing you a big favor by using your product or services, they’ll negotiate endlessly on the price and keep getting into endless debates about the most minute(and irrelevant) issues possible.
As an entrepreneur and consultant both I too have run into the thought of segmenting customers into good,bad and ugly but I am not completely convinced if that’s such a good idea. I mean on one hand there’s a thought of optimizing the whole thing for a better ROI on other hand there’s this idealistic thought that customers/clients should be treated fairly and equally irrespective of their spending powers and other behaviors. I for sure would like to get a fair/equal treatment in all the products and services that I use irrespective of the segment I belong to.
If you are committed to offering a delightful customer service the non-segmentation of your customers is highly likely to come in your way. As pointed by Seth Godin here
If you’re going to be obsessed with delighting customers, it’s a lot more efficient to focus on customers that are able to be delighted.
A case in point being if a particular bunch of customers is impossible or way too difficult to delight/please why waste your resources on them when you could focus ’em on some other set of customers that are more likely to be delighted by what you are offering?
A few things I could think of that one needs to keep in mind if such a situation arises are
- Is the customer bad or your offering?
A situation like this can also be a opportunity to give your offering another in-depth look. Maybe the customer is right and there’s indeed a scope for offering a better solution at the same or reduced price or maybe the customer service offered isn’t up to the mark. So before branding a customer as a bad apple, give a second thought to their feedback and see if there’s a genuine problem there.
- How would it affect the Word of Mouth?
While not giving the same time, attention etc to a not so good customer might be a good utilization for your resources it might have a spill over effect. In cases like these it is also pragmatic to ensure that your segmented behaviour will not spiral into a bad WOM loop. To avoid that ensure that this bunch/segment are not influencers/thought leaders or highly connected individuals from your target segment. For ex: If you are targeting a product or service aimed at doctors and for some reason you decide to segment them, try to ensure that your segmentation policy will not spill over to other doctors and doctors as a community tend to be highly connected to each other
- Customer Segmentation != Spending power segmentation
While you’ll find plenty of real life instances in which retailers/suppliers and many more tend to treat customers with high spending powers differently, it’s not the most wise thing to do. When I started this discussion though I included “paying bills on time” and negotiation I never mentioned spending power as the deciding factor. I strongly feel segmenting your customers based on just their spending power isn’t such a good idea
- Do not do unto others as you would expect they should do unto you
One should always keep “The Golden Rule” in mind before taking any call on customer segmentation. This will most certainly save you from some bad decisions
What do you think about treating different customers differently?
One should forecast what the target audience expects and provide services within a guideline. So it depends on the how converged the target group is. If its a product or service that targets multiple groups, their expectations will be different and hence will mandate to
be handled differently.
Thanks for dropping by Sreekanth. “It depends on how converged the target group is”, agreed but even in a converged target group there will always be disparities for example Service would matter for some, for some it would just be the cost. Some will be polite in their conversations, while some will not.
Also,I feel even in a converged group people’s expectations can be different as they are ultimately different individuals at some level or another.