Demarketing

Under demarketing (also: reducing marketing, customer exclusion or exit management ) refers to the targeted exit or not including a customer relationship between a company and a customer . Demarketing activities can be justified , for example, by negative customer values , foreign target groups or a new strategic direction of the company. Furthermore, a certain exclusivity of certain goods and services can be created through demarketing . The importance of demarketing has risen sharply due to target group marketing and customer value-oriented marketing .

Reasons for customer exclusion from the provider

The exclusion of customers can be divided into company-related and customer-related reasons. Company-related reasons include a changed strategy with regard to the customer segment or a changed portfolio of products and services. Changed customer needs (for example due to a changed life situation such as education, living, family etc.) or behavior-related reasons (for example problem customers who constantly complain unjustifiably) are customer-related reasons for the supplier to terminate the customer relationship. The changes on the customer side are ultimately expressed in the frequently collected customer values . For example, customers are excluded who have a low or negative contribution margin and who are not expected to have any significant sales potential in the foreseeable future.

Examples

Termination offers and severance payments from flat rate providers in the telecommunications sector
Minimum order quantities or price increases for certain products (e.g. high expenses for stock purchases for small investors; however, the literature only describes this procedure as partial exclusion, as the company primarily tries to make the affected customer group profitable)
Admission criteria in discos
Exclusion of certain distribution channels ( e.g. discount stores for premium products)
Educational communication against alcohol, tobacco and drugs (e.g. from sports equipment manufacturers)
Reduction of the support effort to reduce costs (for example, ordering flight tickets for certain customers only via the Internet and not by phone or instead of a consultation with an insurance company just referring to a website)
Outsourcing of certain customers to a subsidiary

opportunities

By excluding certain, mostly unprofitable customers, the company can increase its profitability. In certain cases, however, a company can also secure or improve the security and satisfaction of existing customers by terminating the relationship with the supplier, for example by excluding violent air passengers or football fans. This can also improve the safety of your own staff.

Risks

Demarketing is associated with high risks for companies. It is to be expected that customers who have been driven out cannot be won over to a company again. Furthermore, they can through negative word of mouth , the Image worsen the company and solicit other potential customers. There is also the risk that the wrong customers may be excluded. For example, a small customer who is not profitable according to the usual customer value analyzes can be excluded, although he may be doing positive word of mouth or still has a high purchase potential. In addition to the deliberate exclusion of customers, it can also happen that a company unintentionally excludes potential customers due to its product range, price setting or the choice of distribution channel.

Forms of demarketing

In their 1971 article "Demarketing, yes, Demarketing", Kotler / Levy mention four forms of demarketing:

1. East sensitive demarketing

2. Unintentional demarketing

3. Selective demarketing

4. General demarketing

swell

B. Günter, S. Helm: The termination of business relationships from the supplier's point of view. In: M. Reese, A. Söller, B. Utzig (eds.): Relationship Marketing: Location determination and perspectives. Springer, Berlin 2003.

T. Tomczak, S. Reinecke, J. Finsterwalder: Customer Exclusion: Dealing with Unwanted Service Customers. In: M. Bruhn, B. Stauss (Hrsg.): Service Management Yearbook 2000. Wiesbaden 2000.

Urs Bumbacher: Relationships with problem customers . In: M. Bruhn and B. Stauss (eds.): Service Management 2000. pp. 423–448, Wiesbaden 2000.