I’ve been going to the same dry cleaner in Indianapolis since 1988. Through that time there have been store location changes, personnel changes, billing errors, lost clothing….well, you get the picture. All of us go through it to some extent. The one thing that kept me coming back was Same Day Service. I like being able to drop my bag off in the morning and get the finished clothes back that evening. It was the One Big Thing that kept me as a customer.
Recently, the manager of the store I frequent started asking me if I “really needed the clothes back today?” You know the voice. We said we would do it, but we really don’t want to. Some of the time I would agree to next day, but I wasn’t a happy camper.
Finally, one of the customer service people told me that the company was phasing out Same Day Service. Ouch. She said a lot of customers were unhappy. I raised my hand and identified myself as being in that circle. In fact, I told her they would lose me as a customer if I could find someone else to do it. Not angry, just resigned to change providers.
The next day I received a voice mail from the manager. She heard about my comment and wanted to make their policy clear. They’ll still do same day service, but only if I REALLY need it. OK. So it becomes a negotiation each time I come in. I need to really grovel to get the service and recognize that I’m putting them out. Even then, I can’t really count on them agreeing to do it. To me, that’s the same as it not being available.
The next day I started shopping for a new cleaner and found one within a mile of my home. They have a drop box so I can leave my bag any time day or night. They have lockers so I can pick my finished clothes up 24/7. And they have Same Day Service. There’s no negotiation. I love it.
Most businesses (and customers) face similar situations. There’s something the customer wants – the One Big Thing – and some of the Big Things are not really part of the business model. They can’t be. Businesses can’t be all things to all people. They have to focus to excel.
The customer, or even better – the customer segment, may be very attractive. However, the business model really cannot accommodate providing all One Big Things. This may be a product feature. Or a service – like fast order cycle time.
These customers – whose One Big Things do not align with the business model – are often termed “bad fit” customers. In our experience, we find that between 6-14% of a company’s current customer base are in this “bad fit” segment. By focusing too many resources on trying to make these customers happy, companies see huge losses in profitability.
When you find those customers in your portfolio, expect them to be unhappy. When the LRC measures a situation like this, those customers almost always fall into the Vulnerable segment. The thing you’ve got to recognize is that unless you are willing to make a major change in your business model, you’ll never be able to meet their expectations. In fact, as you go through all sorts of gyrations trying to keep them happy, you’re costing your organization money and distracting it from focusing on the customers you were truly built to serve.
Sometimes you have to recognize that a segment might not be that into you – or your business model.