In response to the intense pressure to grow, many companies seek new kinds of customers. A broader customer base seems as if it should always be good for business: More buyers mean more revenue and higher market share. The North Face followed this path to growth in the 2010s, for example, when it leaned heavily into streetwear to attract “urban explorers” alongside its traditional outdoor enthusiasts. After the company added the new customer segment, its revenue rose from $2.3 billion in 2015 to $3.6 billion in 2024.

But targeting a new segment doesn’t always result in growth. Many companies experience serious challenges when the new customers have needs, values, preferences, or identities that differ from those of their current customers. Occasionally, it even backfires spectacularly as brands not only fail to win over the new buyers but also drive off their current ones. Instead of expanding the business, their efforts damage their image and lead to customer boycotts, dips in stock price, and reduced revenue.

Kohl’s, for example, tried to lure younger and less-price-sensitive customers to its department stores in the 2010s by giving more floor space to relatively expensive merchandise from brands like Sephora and Babies “R” Us, shrinking its selection of store-branded clothing to make room. Unfortunately, by changing itself to appeal to hypothetical new customers, Kohl’s made itself less appealing to its dependable old ones: The chain’s loyalists weren’t happy that the low-priced items they wanted had been trimmed to make way for higher-priced things they didn’t. From 2018 to 2025 the company’s revenue fell by 20%, and its stock price plummeted by 89%. From 2021 to 2024 Kohl’s changed its CEO twice.

Lands’ End, Etsy, Sephora, Bud Light, WeightWatchers, and Starbucks are also among the brands that have faced a backlash after attempts to woo new customers. Some of them were able to successfully manage their way back into the good graces of their traditional customers while others proved decidedly less successful. But the overarching story is the same: Anytime a brand grows—or tries to grow—by attracting new segments, it risks creating conflict with the old ones. And the larger a brand gets, the more heterogeneous its customers will become, increasing the likelihood that tensions will arise.

Avoiding that problem—or solving it when it does emerge—requires a deeper understanding of the relationships between customer segments.

In our academic research, case studies, and consulting work with brands across diverse industries, we’ve discovered that there are four basic ways that customer segments relate to each other. In this article we’ll introduce these types of relationships, show how conflict arises from them in predictable ways, and then describe how to identify and eliminate that conflict. These tactics work whether your company is proactively seeking to avoid clashes or is already waist-deep in them and needs a way out of the morass.

How Customer Segments Relate

Two key factors govern the nature of the relationship between segments. The first is whether the value each segment seeks from the brand is unique and independent (what we call divergent value) or depends on the use of the brand by another segment (what we call collaborative value). Customers who buy Timberland boots to wear to their blue-collar jobs, for example, and customers who stylishly pair them with fashionable jeans to wear on city streets are seeking divergent value. In contrast, eBay’s buyer and seller segments get collaborative value because the platform becomes worth more to each segment the more the other uses it.

The second factor is the sensitivity of the segments to other types of customers. Some are indifferent: People who use John Deere tractors for heavy-duty farm chores are unfazed by the suburbanites who buy lawn mowers. But some brand users are influenced by each other—for good or ill. Beats headphones became popular among the masses because many musicians and athletes were seen wearing them. The association of Burberry with “chav” (antisocial, working-class youth) culture, however, turned off its posh customers. When the brand’s nova check design became popular with football hooligans and soap stars, “it encapsulated everything that was bad about the brand or ‘the wrong people’ buying the brand,” Siân Weston, the author of a history of Burberry, wrote.

These two factors combine in four ways to create the basic relationship types in our framework: separate communities (divergent and indifferent), connected communities (collaborative and indifferent), incompatible segments (divergent and influenced), and leader-follower segments (collaborative and influenced). (See the exhibit “The Four Types of Relationships Between Customer Segments.”)

While most of the conflict emerges in the incompatible segments quadrant, it’s important to understand the other three relationship types as well because they offer opportunities for brands to grow by adding new segments without conflict. Understanding how segments relate to each other will help you make key decisions such as which segment to target next and which products and services will make growth least risky and most sustainable.