Customer Retention and Loyalty
Its has been established that it costs 5 times more to acquire a new customer than to retain an existing customer. This has made it imperative for the organizations to focus more on retaining of the customers than acquiring new ones. Organization have realized that building customer loyalty is more profitable than just blindly trying to increase the number of new customers to try its products. Globalization has increased the competition to new heights. Customers are no longer swayed by only low prices. They want value for their money; they want quality products. The purchasing power of the consumer has increased and he can afford high quality premium products and services. If he feels that the product is not up to the standard he perceived, he will switch to another supplier. But if he feels that he has purchased a high value product and service, he is willing to try out other products from the same company for his future requirements.
The marketing team in an organization can build this customer retention and loyalty through its “Prodices” strategy. In fact it has become a necessity to adopt this strategy to beat its competitor and increase customer loyalty. In order to retain a customer and build the loyalty, organization has to not only manufacture quality products, it also has to follow it up with an efficient service. The organization has to continuously keep in touch with the customer after its purchase. It can keep in touch with the customer with its Post-Sales service. This will ensure that customer is guaranteed of lifelong maintenance of the product from the company. His inputs are given importance by the company for improving the quality of products further or even in new product development. If the customer is happy with the service provided by the firm, he is more likely to not only go for repeat purchases of the same product, but also try out other products from the same company. An additional advantage is that the customer would suggest to his peers or friends to try out this product. Thus an effective “Prodices” strategy would not only ensure customer loyalty and retention, it would even be possible to acquire new customers through “word-of-mouth” from existing customers.
Competition
The number of competitors in a particular product category has increased in the past few decades. Globalization has added more intensity and numbers to the competition. The competition is not just between the domestic and local players. The ringside includes MNCs, national, regional and the unorganized in the fray who want to fight it out to get the attention of the potential customer and entice him to buy the product or service. A large number of MNCs from the US has entered the Indian market and trying to woo the customers. They’ve been successful in their efforts too. Chinese are manufacturing a lot of cheap products and they are dumping it to India. This is causing a lot of grievances to the domestic players who find it extremely difficult to compete with the rock bottom prices at which the Chinese goods are sold. Under these circumstances it becomes essential for the local players to redefine their marketing practices. They should realign it into Prodices to overcome the “price effect”. The Indian players are already established in the market for quite some time. They’ve good visibility with their consumers. They can enhance this visibility by following up the selling of products with an efficient service. The obsession for low prices of the Chinese products is a temporary phenomenon. The Chinese just dump their products in other countries. This is not followed up with any kind of post-sales service, as they don’t have any service centers within the country. The domestic players can exploit this chink in their armor by ensuring customer loyalty keeping in touch with the customer and providing a fast and lifetime service.
Global Prodices Strategy
The size of the world is shrinking, not literally but in terms of communication and transportation. Internet has brought the people closer. It has made possible for the customer to get in touch with the company from any part of the globe. The fast Airline services ensure that you can reach any corner of the globe in a very short time. With the advent of globalization there are no boundaries for customers. So it is possible for a customer to buy a product from US and use it in India because of some advantages. Take the case of an Indian software professional spending 3 months as a part of onshore project in US. He buys a Canon camera from a dealer in US while there. After the completion of the project he returns back to India and continues using the camera. In most case the companies would state that the post-sales service is available only within the company they purchased. Canon is a global company with presence in many countries. Now if Canon can provide the post-sale service in any part of the world for these customers who buy the product they can develop excellent relationships with the customer. The customer will be loyal to Canon because of its global service network and depending upon their service, he will be ready to consider buying other Canon products.
The same logic can be applied to financial services as well. A Global bank such as Citibank that provides financial services also gives its specific products such as Credit / Debit cards. Citibank provides Credit card services at any part of the world. A US citizen can buy any product from India using the same credit card. Thus the “Prodices” strategy is applied in a Global level by a service oriented organization.
Thus it can be seen the re-defining the market strategy through Product plus services at a Glocal level will pay rich dividends.
Conclusion
The age of Pure Products or Pure Services has started to fade. This is being replaced with a new hybrid phenomenon – “PRODICES”. The organization has to restructure their existing strategies and redefine it in terms of Prodices. No longer does the customer want a product or a service alone. He has dictated the terms – he wants them both. Organizations have to build resources to realign with this new strategy; because Prodices is the business concept innovation that is going to revolutionalize the world.
