Some websites assign their customers to ‘customer groups’. This can be useful if you want to group customers so you can assign them particular properties. For example you can assign certain customers special tax rules, pricing seperate from the general pricing set or hide product / categories for example.
Once a customer sets up an account, they are by default assigned to the General group. Again, by default, a customer can’t choose if he wants to go in a another group. They are assigned this by the administrator of the Magento website. This can be adjusted though by some custom coding or there might be a reliable extension that will also do the trick.
To assign a customer to an already set-up group, go to CUSTOMERS > MANAGE CUSTOMERS and choose the customer you want to assign to a different group.
Then hit the ACCOUNT INFORMATION tab on the left and adjust the ‘customer group’ dropdown as required.