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!
- 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
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 firstname.lastname@example.org
or via his web site: www.howard-marketing.com