HR Globe

Unpaid advertisers

Profitable customers are those who continue to buy our brand in preference to the competition, regularly and in good enough quantities. The cost of servicing them, as a proportion of their revenue potential, is a small, declining fraction. The happier they are, the more likely they will be to talk about it to other friends and become the unpaid advertisers and brand ambassadors for you. After all, when buying an expensive consumer durable, say a car or a washing machine, whose opinion would weigh with you, your best friend's or a nameless and faceless endorser of the brand in print or TV? There is also the prospect of the regular user becoming a heavy user, trading up to more expensive models or a wider range, all of which considerably reduces marketing costs to the brand owner.

Kind of people matter

Something similar happens when it comes to attracting the scarce, expensive and highly mobile young talent in today's competitive world. The young have little experience, but plenty of opinions, which they are ready to display among their peers. Not surprisingly, among the most powerful reasons given by new employees for their choice of a job, along with pay and benefits, is the `kind of people who work for you'. They go simply by who else among their mates already works in the same place. This is not merely to have people to chat to and have a gossip with but also a sense of reassurance of the quality based on the reputation — again much the same way as in customers.

As we know only too well, some customers are fickle and would easily switch to another brand. The purpose of all good marketing people is to minimise this, by some methods that increase the switching costs, or make it unattractive to leave. Loyalty programmes that involve accumulation of points for continued patronage and a graded system of privileged access to service (such as gold and platinum cards from banks and airlines) are one example. There are better means available, however, that take some effort but cannot easily be emulated, such as exceptional service in times of need.

One-to-one marketing

Free replacements, quick turnaround in repairs, upgrades at little or no costs, benefits for bringing in other customers and individual attention to the needs of a customer through a genuinely responsive and sensitive relationship management team — all of these can add sustained long term preference for one's brands. Not surprisingly, the benefits of such real one-to-one marketing are most visible in consumer durables, although the advertising-based brand-building is more obvious in household and personal products. It is in the high-ticket valuable items that require long-term care that a good service and customer relationship policy pays rich rewards. The core of good competitive strategy as always is to obviate the need to go head on!

Now, try applying the same ideas of non-price competition to people. If you apply the same levels of care to the needs of individuals and let them bring out their best for the company, they will reward you doubly, not only with better performance but continued loyalty as well.

# posted by Shashikant Shetty @ 3:17 PM