Customers are Not Equal

“The customer may not always be right, but they are always the customer. So, let the customer be wrong with dignity and respect.” – Shep Hyken

Every business has customers – obviously. Without customers there is no use of a business – they play the central role in existence and sustenance of a business. Even if the customer is the real boss, the truth is that customers are not equal. Not only does each customer have a separate set of needs and expectations, their demeanour and manner of doing business differs too. Customers may judge a company’s products and services based on their opinions and viewpoint, which means that even if the standard of quality were uniform for all, there would always be variations in the judgement. Customers are not equal and in order to protect their business needs, a company would need to decide which customers would be best for its business and which ones they could let go.

Given that customers are not equal, and that every business may have a large number of customers, the easiest way to manage the ‘inequality’ would be to make some sort of segmentation based on customer ‘habits’, profitability, and preferences. Even if the amount varies, the fact is that every customer should be valuable and profitable for a company, in order to justify the resources and effort a company puts into retaining them. Every company also has to make consistent efforts in finding new customers – which is neither easy nor cheap. While putting together ‘fancy’ advertisements and expensive promotional activities, companies must remember that since customers are not equal, they should target only the ones that would prove beneficial partners for their company. Even while trying to gain more customers, companies must never lose focus of the small percentage of their customers that currently and consistently prove to benefit them.

Focusing on the ‘best’ customers is a process – must be on-going and persistent. It is not easy to gain customer loyalty, and so when a company does gain it, even if through a small percentage of customers, it must hold on to such customers. Despite maintaining a large customer base, a company would know that customers are not equal and it is no surprise that they do have internal segregations for their ‘variety’ of customers, even though on the ‘surface’ all products, offerings, and customer service may seem standard. What kind of customer segregations do companies make and does it help? The fact is that customers are not equal and it would be best for companies to accept that and put in strategies that would help them manage their customers in the way that would retain them for long (or not) as the case may be.

Loyal customers are every company’s dream. Unfortunately, however, not many customers fall in this category and those companies that gain even a handful of such customers, should do everything and anything to retain them. Loyal customers are profitable and not only do they provide repeat business, they double up as the company’s sales force – attracting and encouraging other potential customers to buy from the company by consistently providing positive word of mouth reinforcement. Staying connected with loyal customers would enable a company to understand them better, gain valuable insights on how to get better, and continually strengthen the relationship with them. Given that loyal customers are often few in number, giving each one personal and individual attention is necessary and not difficult. These loyal customers are one of the most valuable assets of a company and hence would be the customer segment that a company should look at growing / strengthening.

Businesses have another set of customers that they refer to as Rebate or Discount customers. It may sound funny, but this is a fitting term for customers that may be frequent buyers, but do so only when there ‘discounts’ or rebates on the regular offerings from the company. In addition, these customers would buy the products with the lowest cost and or with some scheme or incentive. We already said that customers are not equal – but despite the ‘nose’ for everything low cost, this group does contribute a significant portion and adds to the profit of a business. While they may not be as ‘haloed’ as loyal customers it is good to keep them around.

As a customer, you would have noticed that there are times when you would buy things on an impulse / on the spur of the moment. Without any particular thought process in mind, these ‘buys’ happen because you would have liked how the product looked or found the uses impressive. This behaviour would put you in the segment of impulse customers and there are many such customers that a business may have. The need of such customers is to have all the products on display since they are not really ‘looking’ for anything in particular – by complying to their ‘whims’ a business could find that they would account for quite a large portion of their sales.

In business there is probably no other statement as true as customers are not equal. We have just reviewed three very distinct customer segments and the next ‘type’ of customer is the one that buys if and only when they need something. They do not believe in impulse buying, discounts, or even being loyal to a company. While they may be frequent customers, but do not buy unless they are completely convinced of their need and efficacy of a product. It is not easy to please such customers and they could easily switch companies and products depending upon their reasons to buy. Considering their high ‘fly’ risk, a business must deal efficiently and consistently with them, such that whenever they do buy, they come back to the business. Similar to such customers, but not real buyers, are customers that wander about. The ‘window shoppers’ – if that’s what you would like to call them. They scout offerings in stores and sites but do not really buy anything, since they may not be sure what they want. Businesses must make every effort to ‘educate’ these wanderers about the features, benefits, and uses of their products in order to get them interested – the rate of success in grabbing their attention may not always be high.

Even though customers are not equal, the fact is that each one has a ‘voice’ and will make it heard if they feel a surge of emotion. These emotions could be extremely positive – which works well for a company, or they could be negative. The negative emotions, unfortunately, seem to be stronger always and customers do not hesitate to communicate their displeasure to others via any means possible and social media (visible and instant) is usually the preferred option. Even one such review could set a wave of negativity in motion and a company could find itself scrambling to protect its reputation and keep its existing customers informed.

The kinds of customers mentioned are definitely not the only ones that a company may need to deal with. The worst nightmare for any company is the angry customer, who if not handled properly could easily tarnish the reputation and bring a company to its knees. There could be many reasons for customers to lose their cool – it would be in the best interest of the company to manage them tactfully such that their anger does not manifest itself in destructive ways. Customers are not equal and the angry customer is certainly not one to be ignored or inefficiently managed. A company makes a lot of effort and invests huge amounts of resources in gaining and retaining customers, and it takes years to build a reputation in the market – no company can afford to let a minor inefficiency ruin all that.

Knowing that customers are not equal is a great place to start. Once a company can establish its strategies to deal with the different kinds of customers, it would be better equipped to satisfy their needs and manage them based on their expectations.

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