The Foundation of the Six Business Pillars on Customer Patronage
The Six Business Pillars.
In my earlier years in the oil and gas industry, I was thought to understand to succeed in developing a retail network of gasoline stations, customer expectation and satisfaction must converge right at the very first moment. These experiences must be felt consistently at that very moment and next time around. Up to this time, as an entrepreneur and consultant, this teaching remains.
In everyday entrepreneurial life, it is an opportune when silence finds its way to introspection wondering the true meaning of customer expectation and satisfaction. As I have gained more experiences and insights, I contemplate on the same thought stimulating and nurturing the same question as being absolute and ever-lasting.
Analysis
It was learnt customer service, community relationship and promotions are key software in the oil and gas industry as well as in this business. Locations, facilities and its products are the hardware components. The software are services defined by the people who happen to be the employees – the dealer and/or the owner, station employees, contractors and suppliers, and support personnel from the oil company.
The hardware, on the other hand, is the land where the business is situated, the facilities such as the fuel dispensers, under-ground tanks, pipes, signages, toilets, convenience store, ATM, parking, etc. The components: software and hardware, should carve the brand and shape the preferences of its customers. However, one might argue, there is a third element which perhaps belongs in one of the components or is a distinct component in itself, the price of the fuel, the latter being the very reason motorists come into the station.
Patronage
Customers, distinctively patrons is hallmark to any business. Creating loyalty in consumers whose behavior supports business existence by buying the goods and services offered no matter what is crucial. But one may argue fuel is a commodity with its price being a primary variable relative to demand. Well, fuel additives, as product differentiator, if at all successful, simply command higher prices to cover additional costs.
On the other hand, patronage creation because of price is not loyalty at all. Every price cut is potentially the first salvo and will lead to retaliation from competitors and then to a full-blown price war.
(A marketing potentiality into a mere demand – price relationship, of course, within its legal limits, i.e. law against predatory pricing).
Pillars to Success
The foregoing argument on pricing brings us back to the two basic components: the software and the hardware. In reality, fuel retail prices are matched identically if not almost the same among gasoline stations in any trade area – in a street, a village, towns, districts, cities, provinces or even nationwide. Thus, price movements in fuels, gasoline of various octane ratings and diesel, price parity will simply follow-suit maintaining the demand before the movement (sounds oligopoly in Economics 101).
A building block sketch I personally use in explaining the convergence of customer expectation and satisfaction in a gasoline station business:
Patron transformation is hallmark in any business. Brand preference is loyalty but having patrons in your business no matter what, deepens the sense of true loyalty.
In Essence…
The software are pillars withstanding the weight of patron demand. The brand preference might change depending on the performances of its pillars. It links-in the foundation of a solid and reliable hardware which consists of facilities, products and location.
The location stretches underneath all business pillars – 1. Customer Service, 2. Community Relationship, 3. Promotions Activities, 4. Facilities and 5. Price , emphasizing business success heavily depends on 6. Location.
The price, in this analogy, is outside the grid of the business pillars given the characteristic of the oil players seeking and adjusting to price parity at any given fuel price movement in the market.
