Customer Departmentalization – Importance, Characteristics & limitations

Typically, many companies sell different types of goods and services with the label of the same brand. The primary purpose of selling these varieties of goods & services by the same company is targeting multiple group of customers & satisfy with their expected products or services. Such categrization of products is possible due to customer departmentalization.

The mentality of all the customers is not always the same as different customers have requirements of various types. So, it sometimes becomes critical to deal with each group of customers differently. And, here comes customer departmentalization.

Given the distinguished needs of the customers, most of the organizations make specific distinguished customer departments, which are given the task of handling distinct needs of customers. One department handles one type of customer need, whereas the other departments address their needs.

Characteristics of Customer Departmentalization:

Customer Departmentalization is a method of departmentalization. An organization is classified into various departments based on multiple customers’ nature or customer groups. In brief, customer departmentalization is done to serve each of the customers better & thus, increasing profit with maximum customer satisfaction.

This kind of departmentalization is done by those companies whose aim is to handle different customers differently. And these companies consider the customers as the fundamental basis for departmentalization. For instance, in the case of any bank organization, the departments for deposits, cash, withdrawal, loans, or letter of credit are its various customer departments.

Again, in the case of a business organization, the industrial product buyers department & customer product buyers department are the two customer service departments. The customer product buyers department may further be divided into wholesale, industrial buyers & retail buyers. Or, they may include high-priced product buyers, medium-priced product buyers, or low-priced product buyers.

Furthermore, customer departmentalization is also applicable for full-time or part-time students studying graduate or post-graduate business assignments in colleges or universities. Besides, individual departments for the customers of governmental or non-governmental sectors also come under this kind of departmentalization.

In most organizations, the consumer product buyers department comprises some departments like production department, Personnel Department, Finance department & Marketing department. And these departments take the responsibility of haggling with various activities & resources that some specific customer groups needs.

Importance Of Customer Departmentalization:

  • Customer departmentalization helps the organizations that have to deal with distinct customers.
  • It helps in the quick assessment of all the customer’s requirements & expectations & makes their requirements attended separately.
  • Excellent cooperation between the organization & its customers is maintained.
  • As this method of departmentalization compels the management to concentrate on each identified & potential customer uniquely, the customer satisfaction level will be great.
  • Because of this method of departmentalization, the highly-satisfied customers themselves promote the company’s products & services.
  • The taste or preference of each customer can be specially attended with this method.
  • The method is adaptable to the change of environment.
  • An organization gets the advantages of specialization with this method.

Drawbacks Of Customer Departmentalization:

  • Giving special attention to the customers with this method or the close relation of the customers with the organization may increase the customer’s expectations. And, it becomes a challenge for the organization to cope with all their expectations.
  • If the customer needs any product or service that belongs to more than one department at a time, serving him becomes a problematic issue.
  • Sometimes, the organizational members may face difficulty sustaining coordination with the other members and the customers.
  • A low demand period may result in the underutilization of facilities.
  • This method increases the chance of repetition of activities.
  • Departmental conflicts might lead to overemphasis of the department.
  • Giving too much importance to the clients may result in wastage of both time & resources.

The Takeaway:

So, from the above, we can conclude that customer departmentalization is an outstanding initiative as it will satisfy the customers of an organization & fetch more & more customers to the organization. Organizations must also ensure that the overemphasis on the customers is not creating another challenge. So, the method should be applied with caution.

Recommended Article –

Functional departmentalization

Product departmentalization

Process departmentalization

Matrix departmentalization

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