Managing Customer Experience and Relationships, 3rd Edition

Chapter 6 Differentiating Customers by Their Needs

Strive not to be a success, but rather to be of value.

—Albert Einstein

All value for a business is created by customers, but the reason any single customer creates value for a business is to meet that particular customer’s own individual needs. While it’s important to recognize that different customers will create different amounts of value for the enterprise (i.e., some customers are worth more than other customers, a subject we explored in Chapter 5), it’s even more important to understand how customers differ in terms of their individual needs, and this is the topic we will tackle in this chapter. Individual customer valuation methods are fairly well established as an important stepping-stone for managing the customer-strategy enterprise. Academics and business professionals alike spend much time and energy testing the effectiveness of alternative methods and models. But differentiating customers based on their needs is still a relatively new idea, not so widely practiced by companies in a formal way—not even by those professing to take a customer-centric approach to business. At its heart, needs differentiation of customers involves using feedback from an identifiable, individual customer to predict that customer’s needs better than any competitor can who doesn’t have that feedback. In addition to categorizing customers by their value profiles (see Chapter 5), it is vital to categorize customers based on their individually ...