Recently I was sitting in a information session at a local elementary school. The principal did not pause much after his welcome statement and made the following bold statement,
I am not here to tell you how great the school is. I am not going to ask you all to enroll your children in my school. In fact I am actually going to discourage many of you from enrolling. If you have come here just because you have heard how great the test scores are or how great your friends and neighbors find the school is – you may be surprised. You may find the curriculum, teaching methods and our expectations of you may not connect with you. It is better off you know this before you enroll.
Wow! Talk about, segmentation, targeting and positioning.
Don’t get me wrong, the principal was not being rude. He could not be more polite or genuine. He was not saying the children are not qualified or the school has stricter guidelines for admission.
What he was doing was demarketing.
Demarketing is making a strategic choice of not serving certain customer segments.
In general demarketing is defined as reducing demand for a product with barriers and higher prices for a number of reasons, like
- The marketer cannot meet all the demand
- Social causes (e.g., demarketing drugs, tanning salons)
- Protecting your brand and customer mix
In the school’s case, it is a lottery school and has only limited number of seats . What the principal did may look on the surface as a way to reduce demand. But he was also concerned about not alienating his current customers by brigning in new customers who do not buy into school’s methods and values.
If marketing is about finding the right segments and targeting them, demarketing is about finding the segments whose needs cannot be met with your current offering and making sure they do not self-select themselves to be your customers. It is about getting the right customer mix whose expectations can be met and needs served by your product.
Be it a school, blog readership or boat sales, demarketing is as important as marketing:
- So only those customers who prefer you for the reasons that you can control and deliver, choose you.
- So you will not have sudden uptake in customers only to vanish as soon as they appeared.
- So you will not acquire a set of customers whose lifestyle, taste or wherewithal to pay is fleeting or whimsical.
- So you will not be compelled or tempted to change your product mix to serve the customers who shouldn’t be yours.
- So you will not have a bunch of dissatisfied customers who generate significant negative WoM marketing.
- So your core customers will not be turned off by the presence of these wrong customers.
Demarketing is not a tactic like reverse psychology, it is about making choices!
Turn away the wrong customers so you won’t turn off the right customers.