P&G’s go-to-customer strategy

Procter & Gamble is to embrace a new strategy to target entry-point customers as a way of attracting new market for its products. The entry-point consumer refers to persons who are becoming aware of a certain need for the first time. These are consumers who have not consumed such products before need to be introduced to the products as well as the benefits they offer.

Procter & Gamble’s strategy is a shift from its traditional approach in which it has previously concentrated on encouraging repeat sales. The products sold are routinely consumed hence the organisation justifiably saw frequency of purchase and loyalty among the current consumers as being the key to success in the market. Customer loyalty has indeed been the main source of focus for most organisations and for good reasons. As competitiveness in the market increases, the organisation is prone to lose its customers to competitors. This makes it necessary for it to offer value and generate trust to keep consumers coming back. In fact, emotional connections between brands and the consumer has become an important predictor of customer retention.

The rationale for customer retention (as opposed to attracting new customers) is that it costs more to retain a customer than to attract a new one. But as the market shifts towards customer retention, a general weakness has been realised in that few make efforts to attract first time customers. P&G aims at sealing this weakness by attracting customers that are just becoming aware of their needs. But attracting new customers has two dimensions: attracting the customers who have consumed similar products from competing brands, and attracting customers who are consuming such category of products for the very first time. The strategic value of the latter can be high if the marketing process is executed effectively.

Marketing research experts have established that consumers who make a purchase for the very first time tend to be loyal to the first brand they purchased from until such a time as when they will realise their needs are not being fully met. Such customers are more likely to be loyal than customers attracted from other brands. The latter group of customers do not completely lose loyalty to their initial brands. Their loyalty is therefore more polygamous. On the other hand, consumers who have realised the need for the very first time will be loyal to the brand that first met their newly realised needs for much longer. This means that there is considerable value in attracting first-ever customers.

By focusing on marketing products in their trial generation, P&G’s strategic approach is likely to be successful. The market is likely to be curious about what the new products and the needs that they are likely to satisfy. This approach makes it more probable that the organisation will attract customers who are consuming such types of products for the very first time. But success of this strategy is dependent on the organisation being accurate in identifying these first time customers and using appropriate messages that would help in promoting need recognition.