by
Dr Greg Chapman
One of the most popular articles I have ever written was Are Your Customers Cats or Dogs? In it I warned that businesses can have both Feline (High Value Customers) and Canine (Budget Customers) but you need to ensure that you keep them apart. After all, we know what happens when you put Cats and Dogs together. (I am talking about market segmentation!)
If your segmentation is poor, you find that your customers are looking over the fences and seeing that the grass appears greener on the other side. Perhaps your budget offer might appeal to the customers you previously thought to be premium.
In market segmentation, I often like to compare Qantas and Jetstar. Both, of course are owned by the same company, but one is cheap and cheerful, and the other is focused to the business traveller. While the business traveller is still cost conscious, they want reliability and flexibility. Jetstar does not offer this, with delays far more frequent.