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Four Ps of Customer Retention

It's been approximately 40 years since marketing professor (and subsequent guru) Dr. Philip Kotler coined the concept of the four P's of marketing - product, price, place, and promotion.

In my first book, Corporate Image Management: A Marketing Discipline for the 21st Century, I suggested that the 5th P of marketing should be perception, for "nothing touches the customer more than how he or she perceives your corporate image." Also, as Kotler's initial four P's are all inward looking and viewed from the perspective of the organisation, I selected perception over positioning as I felt this would force corporate leaders and marketing professionals to start looking at the world through the eyes of their customers.

In recent months, as I have turned my focus onto my next book, the thought has crossed my mind that Kotler's original four P's do not have as much application to customer retention as they do to customer acquisition.

As a result of much contemplation, I feel a more appropriate set of Four P's for the area of Customer Retention would be People, Policies, Processes/Procedures, and Prevention. A few thoughts on each of these attributes, and their importance in achieving high levels of customer retention, follows.

People - staff must be motivated, trained, and allowed to be customer-focused. TLC - thinking like a customer - should be the standard operating procedure. Need to have a willingness to listen to customer concerns and to ask questions that uncover the full nature of these concerns. Care for the customer is accentuated by a consistent display of service ethics. Internal culture should maximise the willingness of all staff to work well with co-workers and to foster a desire to learn jobs outside their immediate areas of responsibility. Most importantly, you want staff that constantly exhibit high energy and enthusiasm for your customers.

Goal: don't let your people drive your customers away!

Policies - your policies must be flexible, expandable, and customisable. Eliminate the phrase "it's our policy" from the organisation's vocabulary. Train and empower staff, particularly front-line staff, in interpreting and applying corporate policies as guidelines on how to conduct business and engage with customers. Policies that concern corporate ethics and that could have major impact on profitability should certainly be followed to the letter. However, policies that have to do with internal procedures and processes, and which have a direct impact on the organisation's ability to meet individual customer needs, should be used as guidelines to help employees deal with specific customer situations.

Goal: don't let your policies anger your customers!

Processes/Procedures - these need to be made as simplistic and straightforward as possible, in order to provide greater convenience, speed, and ease of access to your products and services for customers. Sign-offs and authorisation procedures should be more streamlined for existing customers than for prospects and new customers. When in doubt, reduce odious procedures and simplify processes for existing customers by granting them higher levels of trust. (A good example - why must a hotel require a credit card imprint from a guest who has stayed in that hotel numerous times before? After all, a returning guest with a multiple stay record is unlikely to abscond without paying his or her bill.)

Goal: don't let your procedures and processes inconvenience customers!

Prevention - one of my deep-seated marketing beliefs is that preventing customer complaints is better than resolving them. In my second job, while still in high school, the owner of the business taught me the 7 P's of business success (please excuse the language): proper prior planning prevents piss-poor performance. To keep good customers, your organisation needs to commit to quality (as defined by your customers) from the top down and the bottom up. Eliminate errors and you eradicate many of the key reasons typical customers have for leaving.

Goal: don't let mistakes cause your customers to leave!

Like Kotler's original four P's, the above are all inward focused. But, unlike the traditional four P's learned in every basic marketing course, the four P's of customer retention are designed to be applied to current customers already captured through the time-honoured marketing mix.

In my mind, customer retention is the art of keeping good customers.™ This art is best applied through a concentrated focus on the Four P's of Customer Retention - People, Policies, Processes/Procedures, and Prevention.

Awaken the four P's in your organisation and watch your customer retention levels ascend to heights previously only dreamed.

About the Author

Steven Howard is a leading marketing consultant, keynote speaker, and author of “Corporate Image Management”, “Powerful Marketing Minutes”, “Asian Words of Wisdom”, and “More Powerful Marketing Minutes”. He may be contacted via email at steven@howard-marketing.com or via his web site: www.howard-marketing.com

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