SHITSTORM, IMAGE DAMAGE

Selective demarketing using well-known practical examples. Thanks go to Frank Keuper, C-Level Coach at Your Coaching Institute and Managing Partner TRANSTECHTURE and Jassir Qushta, Associate Principal TRANSTECHTURE.

Lonsdale (Fashion)

The English fashion brand Lonsdale, which primarily offers sports and sports leisure clothing, was increasingly in demand in the past from customers who wore the clothing at right-wing extremist rallies in particular. The reason for this was the NSDA lettering in the brand name. Customers who do not share right-wing extremist views and also do not want to be associated with them were increasingly put off by the brand's charged image.

As a result, demand in these market segments declined. Department stores took the brand Lonsdalefrom its range and the Berlin police temporarily banned its officers from wearing the brand on duty. The company reacted to the unintended charging of the brand with an increased commitment to events of a politically opposing orientation and openly communicated the undesirability of right-wing extremist customers („Not interested in Nazis„).

Selective demarketing

Unwanted customers, so-called Deficit customers in the sense of the selective demarketing are

• unprofitable, strategically insignificant customers and
• secondly, originally profitable but strategically insignificant customers that are also unprofitable when their derivative negative spillover effects are taken into account.

Under selective demarketingwe understand the targeted management of demand from non-target markets and loss-making customer relationships with the aim of optimizing the efficiency and effectiveness of the entire customer base. As part of the selective demarketing, we focus overall demand more strongly on the value proposition. In doing so, we avert the risks associated with possible customer exclusion (e.g. shitstorms) from the company.

Another example shows how difficult it is to implement selective demarketing.

Abercrombie & Fitsch (Fashion)

With Abercrombie & Fitsch From the company's point of view, overweight people did not meet the requirements of the US fashion company's target group. They therefore had a negative impact on the company's image and were therefore undesirable. The fashion company removed selected large clothing sizes from its range after publicly distancing itself from overweight people and describing them in dehumanizing terms. The communication of the measure was particularly unfavorable. The statement „Fatchicks will never be part of the ingroup“ triggered a Shitstorm from.

Unsuccessful examples of unprofessional selective demarketing can be found not only in the fashion industry.

Kabel Deutschland, today Vodafone (telecommunications)

Cable Germany (now Vodafone) determined that the excessive use of the DSL flat rate by heavy users was having a negative impact on the overall calculation. The heavy users, who were undesirable from the provider's point of view, were initially warned and terminated if their undesirable behavior did not change.

“Unfortunately, we have to inform you that you have come to our attention as part of our consumption analysis with a very high data consumption. (...). If your usage behavior does not change in the sense of a significant minimization of the transmitted data volume, we will be forced (...) to terminate your contract with Kabel Deutschland Vertrieb und Service GmbH & Co. KG without further notice.“

The negative press was huge. Today, telecommunications companies are behaving much more intelligently. They point out to the user that the usage is too intensive and offer the option of a surcharge. This is much better received by the target group.

1 & 1 (Telecommunications)

Also 1 & 1 had to report negative effects on the overall result in the past due to excessive use of the DSL flat rate by heavy users. Excessive users were offered termination, in some cases in conjunction with a severance payment of EUR 100. Users who accepted the offer were not accepted as customers again - for all other customers, the contractual relationship remained unchanged. Although there were negative reactions from affected customers and observers, most customers probably accepted the offer and looked for another provider.

ARAG (Insurance)

The insurance company ARAG was confronted with customers of its legal insurance offering who became unprofitable and unwanted due to a high number of reported and settled claims. ARAG responded to the unprofitability by terminating all of the approximately 80,000 legal insurance contracts with the provider. As far as is known, the terminations were carried out in accordance with the contractual agreements. The Ending unprofitable relationships had a very positive effect on the company's result. Negative effects are not known.

Kronenbourg (beer industry)

Customers who drank the beer very quickly and excessively for social reasons (performance drinkers) were undesirable for the premium beer brand Kronenbourg. This damaged the manufacturer's premium image. The company had an advertising campaign created that encouraged people to enjoy the drink slowly and calmly. This was intended to demotivate the undesirable customers who stood out for drinking particularly quickly. As the Motives of unwanted customers not met the Measure has no real effect unfolds.

Cristal (Champagne sector)

After the US musician Jay-Z the exclusive champagne „Cristal“ by L. Roederer in its music videos and poured it over dancers during a live performance, demand in the supplier's target segment fell. Among other things, it was reported that the brand's drinks were no longer being ordered for selected golf tournaments. The company publicly distanced itself from the unwanted musician via a company spokesperson. An outcry went through the rap world. This outcry is a good example of how a negative customer recommendation in the group of undesirable customers can reinforce the effect of demarketing measures. Today, the „Cristal“ has re-established itself in the luxury segment.

The selected examples only reflect a small part of the often unprofessional demarketing activities. As a rule, they are uncoordinated measures that are not based on a management approach.

​Professional selective demarketing means change through Critical reflection of the customer portfolio, to START NEW, CHANGE the STATUS QUO and GROW through Ethically reflected reduction to ACHIEVE.

Selective demarketing not only focuses on the desired customers, but also sharpens brand awareness, focuses on corporate and marketing ethics, prioritizes employees (employees first, customers second), frees up resources and creates space for change.

The examples outlined show: 

Selective demarketing is primarily a strategic instrument and not an operational crisis manager.