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The 7 Ps of Customer Retention Marketing

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When we think of marketing, we often think of Marketing's efforts to acquire customers. The world, however, is moving toward relationship-based business, including subscription services and subscription commerce—but also most other business.

Consider consumer packaged goods companies that used to have no direct relationship with customers, who bought in box stores. Many CPG companies are now using online and social mediums to build direct relationships with their customers.

In this world, customer retention is just as important as customer acquisition. So how do the 7 Ps of marketing apply to customer retention marketing?

1. People are the most important. Retaining customers is about building relationships, and relationships are about people. Treat your customer as a person, and not a customer; start by hiring people who show they care about others.

Compare how you behave driving in rush-hour traffic with how you drive down your own street past your neighbors. When you know you will see people again, or if you want to see them again, you treat them better.


The whole company needs to care about customers and customer retention, and one executive must be responsible to ensure that's so—hence the rise of the chief customer officer.

2. Product is a very close second in importance to "People." If your product is off, you will have a difficult time with the rest of the Ps. However, if the product is on target, you will accomplish the rest of the Ps much more easily.

When designing your product or service for maximum customer retention, provide quick time to value, continued value over time, and high quality (those are what Apple does so well). Sometimes there is another P: Packaging. I include packaging as part of the product (or service), and the key to it is polish.

3. Place obviously matters when you are figuring out where to put your physical store, but what about when you're online? Does it matter there? Yes. If I am looking to communicate with my customer and offer them an upsell, I could send them an email or message them right while they are shopping, browsing, or working on my site. The first communication is out of context and has a low chance of response. The second is in context and has a higher likelihood of response. “Place” is context, and context matters.

4. Price. In any good relationship, people take care of each other. That is now the expectation in the customer-business relationship as well. Our customers assume that we will look after them. That is what they pay us to do. In an e-commerce business, that sort of relationship means providing deals for our recurring customers. In a subscription business, that means rolling new features (some, not all) into the service, over time, without charging more.

5. Promotion. How should you promote your product or service to customers to retain them, upsell to them... and keep them for the long haul? Quite differently from how you promote to a prospective customer. Why? Because the person is your customer. You know, or should know, him or her. You know what the customer bought from you or how he or she uses your service. You can use that information to message customers in a more targeted, appropriate, helpful, and effective way. Don't spam them with the same generic info you send to everyone else. Send them targeted emails and in-context messages.

6. Processes. To succeed in all of the previous Ps, and for this success to be more than a one-time fluke, you need good processes, such as monitoring social media and engaging customers there, surveying customers for satisfaction, and implementing marketing automation. My company uses its own customer engagement solution to understand how each customer is engaging with the business. We look for positive or negative patterns and respond accordingly, sometimes by person or email but often right in our application with a targeted message based on behavior.

7. Positioning. If you want to retain your customers, you have to know who you are and communicate that clearly and repeatedly to them so they know who you are as well.

Foremost, however, is this: Your actions must communicate your positioning. Those actions are showcased in the people you hire, the product you ship or service you deliver, the price you charge and the discounts you provide, the place and promotions you choose, and the processes you put in place.

Combined, your words and actions say "This is who we are and what you can expect of us."

* * *

By acting on the 7 Ps of Customer Retention Marketing, you can keep your customers; make their interactions with your business successful; and in so doing make your business more successful.


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Karl Wirth is the CEO and a co-founder of Evergage, a customer intelligence and marketing automation solution that enables online businesses to understand each customer and respond in real time.

Twitter: @wirthkarl

LinkedIn: Karl Wirth

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Comments

  • by Rishi Tue Sep 11, 2012 via web

    Great article! Another P I would like to add is platform. It is important for marketers to draw connections between their various platforms - whether in-store or online. Every customer that comes through your store's door is a potential long term lead. Find ways to collect their email address. For example, at checkout, collect their email address. If they ask why, tell them it is for future promotions and discounts. Additionally, you can integrate an email invoice system that will email a copy of their receipt to them, in case they loose their paper copy. Once you collect their email, you can send them your latest products, discounts, and promotions - all while helping build brand awareness and loyalty. For more marketing cheat sheets including "10 Tips for Mobile Usability", check out or tips and tricks at http://mdv.to/NmISj3

  • by Kurtis Tue Sep 11, 2012 via web

    Great article. Really useful for use in my Customer satisfaction and loyalty class

  • by John Tue Sep 11, 2012 via web

    Just on point. Has provided me with a new perspective of the 7 Ps

  • by Leonie Tue Sep 11, 2012 via web

    Thanks – great article. Another P is ‘pre-empting’ customers from leaving. There are predictive analytics solutions which help to identify which customers are most at risk of leaving, so that these customers can be offered a targeted retention offer (which would be uneconomical and ill-advised to offer across entire customer database). For an introduction as to how such systems work you can watch five minute video at: http://www.youtube.com/watch?v=3ZLKaEM4Juw

  • by Tiffany Litherland Tue Sep 11, 2012 via web

    Marketing is moving so far away from what it used to be and into the 'relationship engagement' based business systems. Industry leaders are already paving the way and if you are a small business or startup now is the time that you can meet those leaders on a level playing ground as their marketing changes to adapt to this new system your company can be marketing like the pros alongside, not only matching the attention they receive but surpassing them if you instill all the right tools in advance before the big guys catch up to you!!!

    Another great article by MarketingProfs to help guide our new biz entrepreneurs, thank you.

    Tiffany of Quench Innovations.

  • by Artash Wed Sep 12, 2012 via web

    Great article Karl!
    Direct marketing is the essence of subscription marketing; the identification of audience segments, the tailoring of a message for that audience and the crafting of a compelling offer, testing and appraisal followed by roll out using both traditional and online marketing techniques.
    7Ps are important but also key skill sets here include data marketing, statistics and copywriting.
    You can visit my marketing blog at: http://www.artasharakelyan.blogspot.com

  • by Hector Ocasio Wed Sep 12, 2012 via mobile

    Excelent article! I want to share the article; 5 Ps of domain name. Go to /hectorocasio.com

  • by StarsDie Thu Sep 13, 2012 via web

    Thank you for the article, Karl, great points. And people indeed are the most important in the whole process.

  • by meral Mon Sep 24, 2012 via web

    I think we need to consider "philosophy" and "politics" as other p's, Though some may consider it as part of the positioning, I believe it should be separetly emphasised. It is the base of differentiation for brands and companies nowadays and is essential to manage consistant interactive communication in digital world.

  • by Aniket Nikhade Sat Oct 6, 2012 via web

    With respect to rush hour traffic, there is one more thing that can be looked upon and it is the rush hour traffic on the streets and with respect to the internet when the internet slows down during peak hours, the element of traffic directly points to the fact that if you lose your cool or your temper during rush hour, then definitely you will spoil the situation, or also the situation will go out of control, so rush hour traffic as you point out it relates to retaining the customer, which is of course important, but also needs a good emphasis.

    As far as the product is concerned it is the content and design of the product that both matter.

    Place is definitely important, but by place it means location, from where
    you are going to sell the product, followed by what you have mentioned,
    again having a website for the product will definitely make a lot of
    difference.

    Promotion is an extremely well chalked out, but again why the concept of
    upselling needs to come into Promotion, however, rest of the things mentioned in Promotion are correct.

    Implementing marketing automation is definitely need of the hour, but again Social media can be a part or a way of selling the product and not the entire thing. One cannot rely completely on social media as far as the
    sales are concerned.

    The last element Positioning is absolutely perfect, which also brings the
    article to an end on the right note.

  • by Indransh Gupta Tue Apr 30, 2013 via web

    I like your article. It is very informative. Thank you so much for sharing such priceless information. Hats-off to the writer. Keep on posting such nice articles. Love to read you. Thank you so much.
    http://www.financetics.com/2012/10/elements-to-increase-customer-retention.html

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