Six Business Pillars on Patronage
The Six Business Pillars – In my earlier years in the oil and gas industry, I was thought to understand that to succeed in developing a retail network of gasoline stations, customer expectation and satisfaction must converge right at the very first moment customers come in your station. The experience must be felt consistently at that very moment and next time around. Up to this time as an entrepreneur and sine my corporate life, the teaching remains intact.
In everyday corporate life, it is 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 still contemplate on the same thought stimulating if not doubtfully nurturing the same question as being absolute and ever-lasting or relative and progressing.
It was learnt customer service, community relationship and promotions are key software in the business of gasoline stations as well as in any business. Locations, facilities and its products are the hardware components. The software are services defined by the people who happen to be the station 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.
Customers, distinctively patrons is hallmark to any business, creating loyalty to all levels of consumers whose behaviour supports business existence by buying the goods and services offered no matter what. But one may argue fuel is a commodity with its price being a primary variable to its demand. Well, fuel additives, as product differrentiator, if at all successful, simply command higher prices to cover additional costs. 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 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 textbooks).
A building block sketch I personally use in explaining the convergence of customer expectation and satisfaction in a gasoline station business:
Patron transformation from customer is hallmark in any business. Brand preference is loyalty but having patrons is loyalty to your business no matter what.
The software are pillars withstanding the weight of demanding patrons whose 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 block is stretch underneath all pillars – Customer Service, Community Relationship, Promotions Activities, Facilities and Price emphasizing business success heavily depending on Location. The price, in this analogy, is outside the grid of the pillars given the characteristic of the oil players seeking and adjusting to price parity at any given fuel price movement in the market.