TARGETING THE RIGHT CUSTOMERS - Principles of service marketing management

Intrawest targets customers who will enjoy the skiing experience that it offers, can afford this relatively expensive sport, and are also likely to purchase additional services at the resort. It also appeals to non-skiers looking for a mountain vacation. This company is not alone in recognizing the need for ongoing investments to keep current customers loyal and to appeal to prospective customers.

Managers in innovative service firms constantly debate what new services or improvements in product elements they need to offer to attract and retain customers in attractive target segments. Whistler would not have grown to its present size if it had continued to rely on skiers from nearby Vancouver, which is close enough to allow residents to make an easy day trip to the slopes. Its carefully planned growth is designed to attract vacationers who will spend a week or more at the resort.

In this chapter, we continue to examine the question, Wltat customers should we serve and how should we relate to them? (see the service decision framework. In particular, we emphasize the importance of asking: Witch customer relationships are worth developing and preserving? A service business must take a focused approach to its markets, targeting prospects in the desired segments, while seeking to avoid those it cannot hope to serve profitably.

In the case of nonprofit organizations, where financial profits are not the goal (except in fundraising), the objective should be to focus on attracting and serving those customers who are central to the organization's mission.

Acquiring the right customers is only the beginning. The real challenge lies in building a relationship with them, growing the volume of business they transact, and maintaining their loyalty over a long period of time. Even when customers fit the desired profile, a few may prove through undesirable behavior to be candidates for prompt termination rather than retention.

Although some believe the saying "the customer is always right," that's not true in every instance. We address this issue in more depth later in the chapter when we discuss the different ways in which customers may misbehave.

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