The Power of the 5th “P” – People

We often hear about the Four Ps of marketing – namely Product, Price, Place (also known as Distribution) and Promotion, but its People, that can make all the difference between a good marketing strategy executed brilliantly, and a great marketing strategy which flops.

A recent article by Zeynep Ton of the Harvard Business Review, titled Retailers Should Invest More in Employees, explores the connection between customer service and low cost retailers.  To summarise his findings, Zeynep found that contrary to popular thinking, low cost retailers who invested in their staff (through better conditions, better pay and very importantly better training) tended to be more profitable.  That’s, right, when you spend more you can make more!

But How could that work I hear you think?

Lets start with the logitics side of things.  It is your employee, not the inventory management systems that can identify and fix a messy shelf.  Its the employee not the Point of Sale system that can tell when the price on something doesn’t scan up correctly and fix it.  Its the employees not the rostering systems that can see there are too many customers in the cashier queue and pen an additional checkout.  when you fail to invest in your human resources, you fail as a business to make the transaction as efficent for your customer and your conversion rate and profitability suffers.

The other really important area that your employees affect the success of your business is in their enteractions with customers.  Happy, engaged staff are much more likley to give customers a sincere smile, answer their questions in a helpful way, or go the extra mile in helping a customer who has had a bad day, or bad experience with your business.  These experiences form the foundations of real customer loyalty, brand equity and most importantly the profitability of your business.

So how can you achieve a more engaged workforce?

Put simply you need to start looking at your human capital as you would any other capital investment.  Considering the return you can make on even small investments in this resource, it is often the most effective place to start investing.