How to attract new customers without alienating the old ones

When growth goes wrong

Consider Kohl’s, which in the 2010s attempted to bring in younger, more affluent shoppers by partnering with brands like Sephora and allocating less space to their lower-cost store brands. In doing so, they alienated their core customers who relied on those affordable offerings.
The result? A 20% drop in revenue and a staggering 89% decline in stock price between 2018 and 2025.

Gillette faced backlash in 2019 after releasing an ad that took aim at “toxic masculinity.” While applauded by some for aligning with social progress, many long-time customers felt accused or excluded.
The result: Public boycotts and significant brand damage, despite the good intentions.

Bud Light’s 2023 campaign featuring a transgender influencer led to a sharp ideological conflict with its traditional customer base, causing a 20% sales drop and the end of its reign as America’s top-selling beer.

And Supreme, originally a niche skateboard brand, suffered a 7% sales decline after its core audience of skaters felt alienated by high-end collaborations and an influx of fashion consumers who didn’t share the same brand identity.

European markets have not been immune to similar dynamics:

• Marks & Spencer (UK) has, over the past decade, struggled with repositioning its clothing line to attract younger customers while retaining its older, loyal customer base. Frequent changes in fashion direction and store layout left core shoppers confused and disengaged.
• Auchan (France) attempted to reposition itself as a more modern, experience-driven retailer, but by cutting back on traditional product ranges and adjusting pricing models, it alienated its price-conscious, family-oriented base. Customer erosion followed, particularly in suburban regions.
• H&M (Sweden), though globally successful, has faced criticism for trying to push its sustainability narrative to appeal to eco-conscious Gen Z consumers, while failing to convince legacy shoppers that the brand’s fast-fashion identity had truly changed.
• Burberry (UK) in the early 2000s had to actively combat its association with “chav” culture, a brand-image conflict where its luxury identity was diluted by broader mass-market appeal. A complete repositioning, including pulling back on logo-heavy designs and re-elevating price points, was necessary to restore brand exclusivity.

Why conflicts emerge between customer segments

The issue isn’t necessarily the pursuit of new segments. It’s a failure to understand how segments relate to one another. The research identifies two key factors:

1. What type of value do customers seek?
   • Divergent: Independent, different values (e.g., fashion vs. function).
   • Collaborative: Interdependent, shared value (e.g., eBay buyers and sellers).
2. Do segments influence each other?
   • Indifferent: Unaffected by each other (e.g., farmers vs. suburban lawn mower owners).
   • Influenced: Perceptions and preferences change based on who else uses the brand (e.g., Burberry and “chav” culture).

From this, four basic customer relationship types emerge:

• Separate Communities: Divergent + Indifferent (e.g., Nike runners vs. basketball players)
• Connected Communities: Collaborative + Indifferent (e.g., LinkedIn)
• Leader-Follower Segments: Collaborative + Influenced (e.g., Le Creuset and home chefs)
• Incompatible Segments: Divergent + Influenced (e.g., Kohl’s old vs. new customers)

Understanding these relationships helps brand managers make informed choices about when and how to expand. Crucially, it highlights when new customer acquisition efforts may risk alienating loyal customers.

Types of conflict

• Functional conflict: Customers disrupt each other’s experience (e.g., Starbucks commuters vs. “third place” lingerers).
• Brand-image conflict: New segments change what the brand stands for (e.g., Tiffany’s silver jewelry threatening exclusivity).
• User-identity conflict: Customers feel the brand no longer signals who they are (e.g., Supreme and the skateboarding community).
• Ideological conflict: Customer values clash (e.g., Bud Light, Gillette).

These conflicts don’t just hurt customer loyalty – they can damage the brand’s meaning, reduce revenue, and even require costly repositioning.

What brands can do

1. Separate segments strategically
   • Use distinct channels, subbrands, or physical spaces (e.g., Starbucks Reserve, Timberland Pro). Tailored communication and experience design can help reduce friction.
2. Establish leader-follower hierarchies
   • Build prestige tiers with visual and pricing cues (e.g., Levi’s Red Tab vs. Blue Tab). This protects status-driven customers while welcoming aspirational ones.
3. Let go of low-value segments
   • Like Six Flags did, intentionally “fire” a segment to improve experience and margins. Quality over quantity can drive more sustainable growth.
4. Manage growth proactively
   • Use qualitative insight and research to anticipate inter-segment tension. Map segment relationships and test brand elasticity before launching new initiatives.
5. Design for flexibility
   • Modular brand architecture, differentiated offerings, and adjustable messaging give brands the flexibility to pivot without alienating key audiences.
     

Final thought

Growth should never come at the cost of your brand’s integrity or core audience. The path to sustainable growth lies not in treating customer segments as isolated targets, but in understanding how they interact. Brands that manage this well are not just expanding – they are evolving with intention.

Understanding the interplay between customer groups allows you to spot hidden risks and seize unseen opportunities. With clarity on segment dynamics, you can make better strategic decisions – and grow without regret.

Want to explore how your brand can grow without alienating its foundation? 
Get in touch to discuss strategies tailored to your audience landscape.

Mikkel Heideby

Partner & CCO