Selective demarketing is an efficient way of weeding out. Hardly anyone is aware of the presence, significance and impact of unwanted customers. At least they don't talk about it. And yet studies show that almost every company across all sectors is affected. Often even massively affected!
Unwanted customers, so-called deficit customers in the sense of selective demarketing, are on the one hand unprofitable and strategically insignificant customers.
Under selective demarketing we understand the targeted management of demand from non-target markets and loss-making customer relationships, with The aim is to optimize 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.
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Marketing ethical reflection
The fact that selective demarketing can also include, deliberately denying customers a service or even actively excluding them from offers suggests that at any time and for any measure of selective demarketing it must be ensured that neither against applicable law (e.g. prohibition of discrimination) or internal company ethics rules (such as Codes of Conduct), still marketing ethical principles are violated.
Particularly in the implementation phase of the demarketing management process, it is therefore necessary to check whether the respective demarketing measures can be assessed as marketing-ethically reflected and thus legitimized for implementation. To ensure this, we use a specially developed Reflection approach to.
Our, reflecting the marketing ethic, Process approach is based on an iterative, contrasting and comparative study that subjected all case studies of selective demarketing available in practice and discussed in marketing science to a rule-based examination and a cost-benefit analysis.
Demarketing stage-gate approach
The resulting marketing ethics reflection model follows the structure familiar from innovation management Stage gate model. Selective demarketing must therefore runs through several successive test steps (gates) and can only be transferred to the application if successfully passed all test phases (stages) have been made.
Selective demarketing - Stage gates 1 + 2 and 0
The Initial phase includes a Legal qualification, which ensures that the measures under review are not in conflict with applicable law. If there is reasonable suspicion that the selective demarketing constitutes a violation of the law, the next review stage cannot be reached and the measure must be subject to a corresponding revision.
However, if this is not the case, in Phase 2 of the reflection approach a more precise View of those affected by the measure Potentially affected customers thrown up. It must first be clarified whether the undesirability, and therefore the reason for the exclusion, lies in a breach of contract by the customer exists. If this is the case, the third phase can be initiated directly. However, if this is not the case, further investigation is required to determine whether the customers concerned are part of an unprotected market segment are (according to American Marketing Association for example minors or senior citizens).
If the customers addressed by the demarketing measure are part of such a group, the measure can only be transferred to a further review if the exclusion is for their protection or if they are actively helped to switch providers.
Selective demarketing - Stage Gate 3 and 0
The third and penultimate test then focuses on the actual planned implementation the demarketing measures to be tested. The first question to be answered in this context is the extent to which the measure is repressive. In other words, the question arises as to whether the addressed customers will take possible measures. In principle, a repressive measure can only ever be carried over into a further test phase if the exclusion has been announced or the customers are actively supported in switching providers, as in phase 2.
However, if the exclusion is not repressive, it is only necessary to ensure that all unwanted customers have been informed transparently that they are unwanted from the company's point of view and why. At the same time, respectful treatment of all affected stakeholders must be guaranteed. Selective demarketing is a strategy that does not only affect the company itself.
Selective demarketing - Stage Gate 4 and 0
Can the measure subsequently have a positive Cost-benefit balance about these stakeholders, it can be regarded as reflecting marketing ethics and approved for implementation.
Selective demarketing as part of corporate transformation
Selective demarketing is Part of the company transformation. Transformation means Change through critical reflectionto NEW to START, the STATUS QUO to CHANGE and the BUSINESS to EXPAND.
Selective demarketing is a Approach to the transformation of customer orientation - away from the „customer is king“ broadband antiseptic and towards the „the right customer is king“ philosophy.
But selective demarketing is much more than that. It not only focuses attention on the desired customers, it also raises brand awareness, increases the importance of corporate and marketing ethics, focuses on employees (employees first, customers second), puts Resources and creates space for change.
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