Segmentation of Your Rivals’ Customers

Segmentation of Your Rivals’ Customers

Winning over your rivals’ customers is in many cases an inevitable avenue of market-share expansion. This is especially relevant for mature markets where the extent of market-share expansion that can be achieved via growing the total market size is extremely limited.

Getting your rivals’ customers to switch to your brand can be an expensive endeavour. Since these efforts are ultimately aimed at boosting your bottom line, one of the key objectives to satisfy is necessarily maximizing the returns on brand management dollars. Towards this end, it is crucial to segment your rivals’ customers in a way that allows you to identify and target the most profitable targets.

At Nexus Link, we help you segment your current customers using our Brand Affection – Brand Allure analytical framework.

Brand Affection: Captures the attitude your rivals’ customers hold towards your brand. It comprises both affective (emotional) facets as well as cognitive (rational) facets of evaluation. Emotionally, customers may evaluate your brand based on whether or how much they identify with your brand personality, brand values etc. They may also assess your brand based on rational considerations such as perceived value-for-money, compatibility with their core needs etc. A customer who ranks high in brand affection likes your brand very much and evaluates your brand very positively.

Brand affection is especially telling in the case of your rivals’ customers because their attitudes are derived from joint evaluation of you and your rival. A customer who reports high brand affection for your brand after making comparisons holds large potential for switching in your favor.

Brand Allure: Refers to your customers’ intention switch to your brand. Whether the switch materializes however may depend on a host of circumstantial factors that are outside the customers’ sphere of direct control. A customer who ranks high in brand allure is feels strong compulsion to switch from your rival to you.

The Brand Affection- Brand Allure framework categorizes your rivals’ customers into the following four categories for the purpose of targeting efforts:

Prime Targets: These customers hold very favorable attitudes towards your brand (high brand affection); and they feel highly compelled to switch to you from your rival (high brand allure). They make your Prime Targets because all these customers are need is a little more attention – a tug in the right direction.

Windfall Targets: These customers do not like your brand very much (low brand affection); but they probably like your rival even less because they feel highly compelled to switch to you (high brand allure) despite feeling low brand affection towards you. They make Windfall Targets for you because special attention is unnecessary and even futile; their continued commitment to your rivals despite the low brand allegiance gives strong hints that they may be your rival’s Hostages. These customers will most likely switch to you due to triggers caused by your rivals.

Illusory Targets: The fact that these customers hold such favorable attitudes towards your brand (high brand affection) may make them attractive targets for you at first glance. However, these customers are merely illusory targets because they are happily committed to your rivals and have little intention of switching to you (low brand allure). Hence, devoting resources to courting these customers may be a potential pitfall to your brand management profitability.

Out-of-Range Targets: These customers have neither favorable assessment of your brand (low brand affection) nor any intention to switch to you from your rival. They are Out-of-Range for you because any attempt to convert them will be prohibitively expensive, relative to your Prime Targets and Low-Hanging Fruits.

Having identified the above customer segments, resources should be prioritized and channeled towards converting customers in the Prime Targets and Low-Hanging Fruits category.

At Nexus Link, we help each of our clients customize the most appropriate resource-allocation mix in order to maximize the returns on their expended resources.