How to Avoid Conflict Between Your Customer Segments to Gain Growth

Growth is essential for businesses. However, new customers with varying needs, preferences, and identities often accompany growth. Worse, these new customers can annoy or alienate your current customers.

So, how do you grow without making your current business blow?

Today, we explore the central challenge of growth: expanding your customer base without sparking conflicts between different customer segments. Ryan's new book, The Growth Dilemma, which Ryan co-authored with Wharton Senior Lecturer in Marketing Annie Wilson, Ph.D., addresses this dynamic in-depth, and we discuss how companies can better manage these conflicts to keep all customers satisfied and engaged.

As brands grow, they tend to attract diverse customer segments with unique expectations and behavior. This diversity can create tensions between groups, especially when one segment's actions or values clash with another's. 

For instance, a brand known for its exclusivity may see conflict when a more mainstream audience starts to adopt it, or a company that appeals to one political ideology may face backlash when it attracts customers from an opposing one.

We delve into the four main types of conflict that can arise between customer segments and explore solutions for each. For example, these brands dealt with some of them when:

• Patagonia faced a brand image shift when corporate buyers began over-associating the brand with Wall Street, diverging from Patagonia's environmental ethos. The company responded by limiting corporate orders, thereby preserving its original image.

• Younger users leave Facebook because their parents' generation heavily uses it. Exclusivity can be key to maintaining engagement from specific age groups or communities on social platforms.

• New Balance once faced a backlash after a policy stance was misinterpreted by extremist groups, forcing the brand to distance itself from these associations publicly.

Ultimately, understanding and managing these potential conflicts requires brands to identify sources of friction early on and employ various strategies to keep segments separate when needed. Segmenting offerings, using sub-brands, or creating distinct product lines are all ways to cater to different groups without diluting brand identity or customer satisfaction. 

In this episode, we also offer actionable advice on navigating the complex terrain of customer segments and brand management and setting up companies for smoother, more inclusive growth. Whether you're a business leader or a marketer, this episode is packed with insights into balancing growth with customer harmony, ensuring each segment feels valued without alienating others.

This episode also includes ways to:

• Recognize the importance of managing inter-customer relationships to foster sustainable growth.

• Understand how Functional Conflicts often arise in omnichannel setups and ways to resolve them.

• Learn about Brand Image Conflicts and how brands can address image tensions, as Patagonia did.

• Distinguish between Identity and Ideological Conflicts and why one often influences customer group dynamics more than the other.

• Gain insights into using segmentation strategies, like sub-brands or distinct service channels, to reduce conflict.

• Discover how a clear brand identity can attract and repel certain customers and why that might benefit or hinder growth.

Be the first to hear about pre-order and launch dates and invitations to exclusive book launch events for The Growth Dilemma, published by Harvard Business Review Press!