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Customers aren’t always right and certainly don’t contribute equally to your business’s success, but…customers always pay your bills!
I am struck by two groups of business leaders – those who treat customers as an afterthought to profits or products and those who treat customers as the reason they exist. I have always ascribed to Peter Drucker’s adage that we are not in business to create a profit but rather to “create a customer.” It is through customers that profits come! That said, profits come differently from varied customer segments.
High-volume customers keep a business afloat, and it is wise to position your services and people to ensure the loyalty of that segment. While low-volume customers should receive a positive and respectful service experience, segmented service delivery reflects good stewardship of your service delivery resources.
Suppose you segment your customer base into low frequency/low spend, medium frequency/medium spend, and high frequency/high spend. It is reasonable to offer quality products and services to all groups but make what the low-spend group receives more generic, the medium group more customized, and the high group more personalized. Collecting data on your customers’ purchase behavior can guide you on how much to invest in augmented services and even service recovery.
While Thomas Jefferson wrote that all men are created equal in the context of the Declaration of Independence when it comes to customer experience creation, some customers are more equal than others…all, however, should be treated with respect and excellence.
Here are a few takeaways on how to tailor service augmentation and service recovery spending to customer segmentation:
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Segment Your Customer Base: Identify and categorize your customers into low, medium, and high frequency/spend segments. This segmentation helps you tailor your service delivery to effectively meet each group’s specific needs.
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Provide Quality Service to All: Ensure that every customer receives respectful and quality service regardless of their segment. This establishes a baseline of excellence that supports brand reputation.
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Customize Services Appropriately: Offer generic but quality service to low-frequency customers, more customized services to medium-frequency customers, and highly personalized experiences to high-frequency customers. This ensures efficient resource allocation and maximizes customer engagement.
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Collect and Analyze Customer Data: Use data to understand customer purchase behavior and the preferences of your key customer segments. This information determines how much to invest in service enhancements and recovery efforts.
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Focus on High-Value Customers: Pay special attention to high-frequency customers who contribute significantly to your business’s revenue. Ensure their loyalty by offering exceptional and personalized services that exceed their expectations.
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Efficient Resource Allocation: Allocate your service delivery resources wisely based on customer segmentation. This ensures that your efforts and investments yield the highest possible return.
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Invest in Service Recovery: Be prepared to invest in service recovery efforts, especially for high-value customers. Swift and effective issue resolution can turn a negative experience into a positive one, reinforcing customer loyalty.
Understanding that all customers aren’t equal or right allows for a nuanced approach to customer experience management and ensures long-term success.
Related: Walking the Talk: Cultivating Authentic Customer Service