Prominent American marketer of the 1960s, Jerome McCarthy is credited with coining the 4 P’s of marketing – Product, Place, Promotion and Price. This marketing mix has since been expanded to include three more important factors; namely, packaging, promotion and people. Each one of these P’s is quintessential for a credible marketing strategy.
However, packaging of a product has often been discussed only with respect to the market positioning. A premium packaging is often associated with higher costs. Therefore, if your brand’s unique selling proposition is its low cost, you wouldn’t make the mistake of using premium quality packaging. But did you know that packaging has a wider scope than just positioning? Product packaging can often determine how loyal your customers can be. Here are a few ways business owners and marketers can use packaging to ensure a higher lifetime value of the customer.
Complementary Unit Lifetimes
This is a strategy often deployed by businesses whose products have complementary units. Razor blades like those from Gillette are a fine example of products that could make use of this strategy since they contain a stick and a throw-able blade. In such cases, the number of blades that are packaged with the stick is done in such a way that the lifetime of the two units are not equal. This way, when the stick gets worn out, the customer will still be left with unused blades. Similarly, the customer could be stuck with a perfectly working stick when the blades run out. Such scenarios force the customer to make a repeat purchase in order to ensure they could continue to use the blades or sticks.
Packaging Service As A Contracted ‘Product’
Some service based businesses are required only once in a few months. Think car servicing or carpet cleaning. According to Jay Barnett, the owner of Priority Floor Care, a commercial carpet cleaner in Perth, customers regularly miss out on scheduling appointments until they need service desperately. In addition to this, service businesses that are utilitarian may see considerable churn since customers do not mind replacing one business with the other based on price.
A good way to tackle these issues is by packaging their service as a product through attractive ‘annual maintenance contracts’. Let us say a car service costs $150 per session and customers typically their cars only once in 8 months (although it is recommended to service once in six months). If you can offer an AMC that costs $400, but offers 3 sessions every year, then not only do you ensure three repeat buys from a customer, but may also save the customer the trouble of remembering the next appointment.
There are dozens of other ways to trigger customer loyalty through product packaging. For instance, businesses regularly do away with smaller volumes in order to sell more. A great example of this phenomenon is when you buy popcorn or Coke at a movie hall. Also, at some restaurants, customers are allowed unlimited refills of Coke at a higher price. This encourages larger consumption while the customer continues to think of the offering as an attractive deal. From the perspective of business, such packaging and pricing schemes ensure frequent purchases and thus higher customer loyalty.
What are some other ways in which product packaging impact customer loyalty? Chime in with your thoughts below.