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Getting your Trinity Audio player ready...
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“The customer is king” is a cliché suggesting that businesses are formed to serve customers. This implies having the right product at the right price combined with attention to the customers who buy the product or service. If customers are not satisfied with the output of a business, they will either go elsewhere or refrain entirely. Another expression, “the customer is always right” was popularised by retail pioneers such as Harry Selfridge and Marshall Field. It is a notice to employees to treat customers in the best possible ways to ensure their satisfaction. Pertinently, Selfridge, the founder of the famous Selfridges having served in the retail business of Marshall Field in Chicago set up Selfridges after relocating to London. The Marshall Field’s chain is the forerunner of today’s Macy’s.
Whether the customer is king or always right can actually be mere clichés. However, in reality, organisations that do not serve customers within acceptable standards will not only lose business but will eventually close down. Consequently, strategy should particularly address the customer if corporate objectives are to be achieved. Five perspectives are connected to the metaphor of strategy as customers: identification, initiation, confirmation, affirmation and multiplication.
Identification
Organisational strategy that does not identify the customer is unlikely to be effective. This identification process is evident in the variety of product and service categories across industries. Certain products are designed for and targeted to women as customers. Others are either for men or children. Luxury items are linked to wealthier individuals and appropriately placed before them. Fine dining restaurants identify their customers as more affluent and suitably locate their outlets. Many years ago, Promasidor, the food company recognized that lower income individuals need milk but could hardly afford it in big packages. This was the beginning of the mini sachet of powdered milk which is now commonplace in Nigeria. The sachets were also made accessible through an amazing distribution network reaching into rural locations. Highbrow areas were not targeted because identified customers were not in such places. Identifying the customer is the beginning of a sales and marketing strategy.
Initiation
The identified customers also have to be initiated into the customer base. Initiation signals the firm build-up of interest in a product or service with the ultimate objective of winning the customer for life. Initiation is not accidental but deliberate in the outreach mechanisms, locations, packaging, convenience and marketing activities to engage customers. Many businesses especially in the consumer products industry offer promotional discounts or free add-ons at the initiation stage. The idea is for customers to experience the service or product. Initiation can also be structured with pricing that attracts long-term customers. An example of initiation strategy at work is how Apple offers a discount scheme for students. Once they are initiated, the likelihood of becoming future product apostles is enhanced. Only customers that have been initiated can move to the next stage of confirmation.
Confirmation
In the competitive setting, organisations cannot monopolize customers. Customer access to choice means that they can switch allegiances without notice. The confirmation strategy enables an organization retain the customers acquired in the initiation stage. Diverse approaches are feasible to practicalise confirmation strategies. Without confirmation, a customer base will be weak and unsuitable forsustained earnings and profit. Customer relationship management processes, loyalty schemes, discount cards, and personalized services are all confirmation methods. Confirmed customers generate more predictable buying patterns in support of corporate revenue projections. Retail shops apply confirmation strategies by offering extensions to their operations such as credit cards, product discounts and periodic promotions. Without a confirmation strategy, customer retention is nearly impossible.
Affirmation
Affirmation strategies go one level higher by designing rewards for customers retained through confirmation strategies. Affirmation concretizes confirmation. Airlines are experts in affirmation strategies with their system of air miles. Air miles are rewards flowing from confirmation to affirmation. Waterstones, the UK bookstore uses a simple stamp methodology. As customers buy books, they get stamps which earn them discounts for future purchases. One of my friends sticks to one hotel whenever he travels due to the excellent rewards on offer. The numerous mail offers we receive from various entities we have patronized reflect elements of both confirmation and affirmation. Consumer product companies regularly affirm their customers, retailers and distributors in annual events. Affirmation strengthens the bonds between customers and the businesses they patronize.
Multiplication
The ultimate in strategy as customers is multiplication because it promotes organizational sustainability. Customers have to be multiplied through intentional cultivation for a business to stay in the market for the long haul. Multiplication is a valuable strategy but competition and inevitable attrition make it somewhat difficult to implement. Affirmed and confirmed customers enhance a multiplication strategy as they become advocates for the brand. In a general sense, multiplication leads to consistent net gains in the customer base. In the absence of multiplication, a customer base can be gradually eroded with resultant reduction in profitability.
Closing note
The five aspects of strategy as customers are identification, initiation, confirmation, affirmation and multiplication. Businesses should specifically apply these strategies.
