Tag Archives: Maslow

What Maslow Means for Keeping Customers

Explaining customer needs through the theory of Maslow is common practice. Marketers often apply the principles to attract new customers. However, if you fail to continue to do this once you have attracted a customer, your ability to retain her will be compromised.

In this article, the authors suggest an approach that takes into account the position of the client within the needs pyramid. After all, if you understand the initial need that has led to a buying decision, you can continue to apply this to retain your customers.

Maslow’s theory of needs – again?

Humans are predominantly driven by universal needs. The original motivational theory of Abraham Maslow (1943) arranged those needs in a pyramid, sometimes referred to as the pyramid of needs. According to the model, people will only strive for gratification of the higher needs in the pyramid after the lower ones have been fulfilled.

For this article, we use a three-layer, simplified version of the needs pyramid.

At the top of the pyramid, Maslow placed the need for self- actualization; the desire to develop your personal self and realize your full potential. The middle part of the pyramid describes the desire to belong somewhere and to be valued. The bottom part of the pyramid represents the basic physiological needs for survival: food, shelter, safety and security.

See also: How to Get Broader View of Customers  

Maslow always remained critical toward his own model. But in this article, we assume Maslow sticks to his own theory and acts accordingly. We use a mortgage product in the narrative, but the argument applies to financial services products in general.

Level 1: Customers need safety and security

Suppose it is the day that a young Abraham Maslow leaves his parental house to start his adult life. Maslow is looking to buy a house to fulfill his basic needs for security and safety and requires a mortgage to do this. His demands are simple: basic, cheap and something he doesn’t have to worry about.

Most financial products will answer to these basic needs. Some insurance products are simply required by law. You’ll need a debit card for making payments, at least for now. Customers looking for these products to fulfill their basic needs receive a warm welcome. However, once a prospect has become an existing customer, the approach often changes.

For instance, after choosing a mortgage Maslow would like to be informed about the suitability in terms of risk and costs. It would be great to receive confirmations that his mortgage still fits his profile and that he has made the right choice, or if better alternatives are available.

Often, this doesn’t happen. Instead, Maslow is being approached with offers made by competing mortgage providers, arguing he could be better off elsewhere. And while Maslow’s current mortgage provider receives payments on time and assumes Maslow is a satisfied customer, Maslow has not been able to resist the temptation and switches to a competitor offering more security and safety, as soon as his contract allows him to do so.

So what could Maslow’s original provider have done differently? First, it should have acknowledged Maslow’s primary buying motivation. As a next step, it should have contacted Maslow periodically to evaluate his choice of product. Providing customers with a regular check on their product portfolio builds relevant customer contacts and ensures some control at the provider.

Level 2: Consumers want to belong and be valued

Maslow, who has advanced in his career and now is a doctor, is looking for a place that allows him to build a practice at home. He learns about a mortgage provider that specifically serves the medical community. A provider like that should be able to exactly serve his needs.

Many financial products can be connected to a specific field of expertise or area of interest. Customers benefit from the specialty expertise offered by their bank or insurer. This may be realized through targeting specific customer groups or customers sharing a common interest. These customers expect a close relationship with their financial services provider.

Often, existing customers do not receive the same treatment as prospects. Maslow would like to remain informed about developments that relate to his profession. And he would like to share his experiences and insights with his financial services provider and colleagues. Because he now belongs to a specific target group, Maslow receives regular marketing messages and newsletters. However, these are often generic, and Maslow lacks the opportunity to share his ideas and suggestions to improve services.

During the course of his mortgage, Maslow is actively approached by competing mortgage providers, arguing he could be better off elsewhere. They may offer more expertise, additional services and other customer engagement activities. Maslow may not resist the continuous temptation and decides to switch to a competitor offering more of the services he is looking for.

So what could Maslow’s original provider have done differently? Again: Acknowledge Maslow’s primary motivation for buying in the first place. If his financial services provider had realized why Maslow had chosen it, the provider could have engaged him through activities and programs aligned to his interests and needs, e.g., by giving Maslow the opportunity to provide feedback and tips, and by actually recognizing his contributions. Companies like Tesla provide an amazing customer experience by acknowledging customers’ contributions to a new software release.

Level 3: Customers strive toward self-actualization

As a doctor, Maslow treats a set of patients suffering from post-traumatic stress disorder. Being confronted daily with the struggles of his clients, he finds it increasingly difficult to stop thinking about global politics and the causes of his patients’ condition. This afternoon, he has a meeting about a new mortgage. It would make him feel a lot better if his financial services provider demonstrates social responsibility and awareness.

Connecting financial services to social themes, lifestyle or trends may not be that difficult. Nobody cherishes a mortgage, savings account or insurance policy, but these are means to an end: the pleasure of owning your own home, to realize dreams or to take care of your loved ones. Managing the carbon footprint and supporting fair trade while avoiding child labor are increasingly the themes to reach younger generations. Only a small part of financial services providers embrace these themes.

See also: 5 Technologies That Connect to Customers  

As an engaged customer, Maslow hopes to hear how his bank or insurer is contributing to making the world a better place. He expects a regular confirmation that he has made the right choice and is very much prepared to pay extra or settle for less service as long as his bank supports his ideals.


Many financial service providers apply Maslow’s theory to seduce customers. Campaigns and commercials cleverly play on human needs. However, as soon as a customer has become part of a back-office system, the urge to leverage these data disappears. This is partly understandable, as many organizations lack a focused customer-retention approach. However, we believe significant steps can be made in customer retention by applying Maslow’s theory.

As a first step, you need to define your pyramid. What are the needs that make up the layers in your customer pyramid? There might be a link to a specific distribution channel. Leveraging all data from the customer on-boarding process is an obvious approach.

Next step is to assess in which layer a customer resides. All customer interactions provide valuable data. Next to questionnaires, interviews and feedback, actions and responses are a tell-tale.

Once a Maslow profile has been determined, the individual customer contact approach can be selected. This step should involve some level of experimenting.

By analyzing all customer contacts, financial service providers will gain valuable insights. An active customer may be involved in product development or asked to become an ambassador. For less active customers, it is important to periodically get in touch and re-assess their product choice.

What’s next?

The motivational needs theory of Maslow is not undisputed. The thought that individuals only strive for higher needs once the basics have been fulfilled, has not been tested by Maslow. To his great disappointment, his theory has been used widely while nobody ever has had the urge to thoroughly analyze or test this.

However, we do have this ambition. Will the Maslow approach add value in the area of customer retention? Is it possible to better understand customer needs through this approach?
Is it possible to create a formula based on customer contact data predicting in which level a customer resides in the needs pyramid?

Marketers are convinced of the relevance of the theory in analyzing initial buying decisions. Applying the same principles to customer retention doesn’t seem like a particularly big step. We therefore are confident that this approach may provide value for retention programs. We are interested to discuss the potential of this model with you in more detail and would love to hear from you!

For this article, Onno Bloemers has joined forces with Leon Veenhuijzen, associate partner at Improven. 

You Must Break Free of Your Culture

By my definition, culture is the house rules. An edgier definition comes from David Balestracci: “Quite simply, culture is created by what is tolerated….Your current processes are perfectly designed to get the results they are already getting.”

In any case, culture is the most powerful force in your organization. It can bring greatness, or cause your failure as you move away from yesterday, through today, to tomorrow. As more and more organizations need to move to the transformational change that is tomorrow, their culture (if it is an addiction to the status quo) becomes the greatest challenge they face.

I’ve been speaking on this subject for many years. Slowly but surely, I’m moving from theory to reality. Early on in my consulting career, I’d proudly state, “we’re going to change the culture.” After having my rear end handed to me after each unsuccessful attempt at cultural change, I retreated to a more realistic but no more possible approach, suggesting that to “change the culture” you must “change the people (educate, rehab, motivate, etc. each individual) or change the people (start anew – with new folks).

See also: Does Your Culture Embrace Innovation?  

In late 2015 and early 2016, I enjoyed an aha moment. Working to rehab a very troubled organization (its culture), filled with good and talented people who had become divided and moved to their lowest common denominator, I realized the best hope was to agree on a purpose (why), shared values and a unifying vision. With this as the starting point, progress continued as each team member individually committed to grow her skills (abilities) and as all members of the group chose collaboration (improved communication/relationships) on common goals and tasks.

In the April 2016 edition of the Harvard Business Review, the cover story reinforced my theory by stating, “You can’t fix culture, just focus on your business and the rest will follow.” I now say, “Amen! Vindication!” (HBR will never quote me, but I am delighted to be able to quote them.)

In 2012, a graphic artist created a cultural continuum slide that I could use to demonstrate the evolution of organizational culture. The slide was formatted on Maslow’s Hierarchy of Needs Pyramid.

From the base of the pyramid, the five levels (steps) are: physiological (survival) needs, safety (security) needs, belonging (acceptance) needs, esteem (achievement) needs and, finally, at the pinnacle of the pyramid, self (actualization) fulfillment need.

To facilitate the “story of culture,” I chose an individual or couple who best personified each step on the pyramid. I also added one action word that supported the culture created by the personality styles of the individuals or culture.

What follows is the rest of the story:

  1. Survival – Fred Flintstone – React. Fred was a simple leader right for a simple time. His goal was survival for himself and his family. Planning wasn’t important. Being able to react was. When he came face to face with a sabertooth tiger, his ability to react was all important. His family followed his lead.
  2. Security – Jim Anderson, an insurance agent (played by Robert Young on Father Knows Best) – Do. Jim was the personification of the OWG (old white guy in charge) in the post-WWII business place and community. The Greatest Generation fought for our security and came home to work hard to create the economic security we all so desired. If you worked for Jim and did as you were told, you would be secure (taken care of). You could work 40 years and get a gold watch.
  3. Acceptance – Archie Bunker – Think. Remember, this show came at the beginning of the social revolution where baby boomers fought the status quo — as a group and as individuals. Remember the Vietnam war protests, Woodstock, civil rights, demands for both race and gender equality, assassinations (MLK, JFK, RFK, etc.) and the chants of “Hell no, we won’t go!” and “If it feels good do it.” Archie in the stereotype was the next generation of Jim Anderson. He wanted to be the “boss” (to think for his family). Unfortunately for Archie, his followers changed. Dingbat, Meathead and Little Girl were not compliant (they wanted to think on their own). Archie’s clan demanded freedom at the risk of security. Archie’s frustration and anger (I believe) resulted from the fact that he did not enjoy the resources nor respect that was given to Jim Anderson.
  4. Achievement — Cliff and Clair Huxtable — Create. This was the feel-good story post the social revolution of Archie’s day. Cliff and Clair represented the hope and change of a more diverse world. Their drive was to ensure their children had every opportunity to be all that they could be regardless of place, color or gender. They were the hope that remains on the horizon of our country and world. They were creating a new social order: new culture, new possibilities. Creativity provides much greater possibilities than does discipline/compliance. A hundred years from now, people will know that Bill Gates understood technology and created computer operating systems that made him and Melinda Gates the richest and most generous people in the world.
  5. Self-Fulfillment – Jane and George Jetson – Imagine. George and Jane lived in a future that we are only now starting to imagine, hoping that what their life was can be real. George and Jane, their daughter Judy, son Elroy, Rosie (their robot maid) and Astro their dog lived large in the universe they occupied. Theirs was a “futuristic utopia.” George worked two days a week about one hour a day. Travel and technology were their world. If it could be imagined, it could be done. Understand that in a century people will reminisce about Steve Jobs, who imagined the possibilities in technology and artificial intelligence and forever changed the world!

Know that your organizational culture can be the most powerful force available to you in the competitive marketplace and the world as it is going to be. If you can leverage your culture for good and change, you will enjoy great success. If you are unable to break the stranglehold that some organizational cultures exercise over their own status quo, your future will be lost in a world of transformational change.

See also: How ‘Cascades’ Can Build Work Culture  

The lesson, in my opinion, to be learned here – is that your culture is defined by its performance and its people. Be certain that both are the best that they can be. As a leader, one of your most important responsibilities is to keep toxins out of the environment in which you live and operate. Don’t ignore reality just because things are going well.

Culture can make you or break you! Keep your finger on your organization’s pulse! When something doesn’t look or “feel right” discover the truth. Address problems. Don’t ignore the painful. Your brand and your culture can be your most valuable assets.

The Key to Building Effective Risk Culture

Building an effective risk culture is much more than changing your organizational culture in line with your vision, mission, corporate values and risk appetite — you must factor in the interests of competing national cultures, sub-cultures, Maslow’s theory on individual self-actualization and the informal groups in the company.

The interactions among all of these are not predictable, and variables cannot accurately be isolated.

An effective risk culture is not a matter of risk assessment or level of compliance; it is a matter of “conviction” — a corporate state of mind where human beings can take well-informed risk decisions because they want to, not because they have to.

ERM policies, systems and reporting dashboards are all part of the foundation for good risk management. Once you have all of these in place, you can start building an effective risk culture. Remember also that there is too much complexity and subjectivity in culture to assume that individual reactions and responses can be aggregated to reflect or give an accurate picture of the whole organization’s  risk culture. You cannot “pop” an effective risk culture in the microwave; it takes a lot of preparation, dedication and time to get it to perfection.

You can have the best staff retention rates in the industry or the most awards for long service — both of these can also indicate a high risk of employee fraud. According to ACFE research:  53% of fraudsters have more than five years of  service and the median loss for fraudsters with six to 10 years of service is $200 000. 52% of fraudsters are between 31 and 45 years old, and older fraudsters tend to cause larger losses.

Scanning the horizon might just be the most important thing to do. You cannot control or stop what is coming; you have to prepare to respond to it. So many organizations spend large amounts of money to focus and report only on what is happening inside the organization, where they actually have control. Your biggest risks are outside of the organization, where you have no control.

Key elements for the future of your risk strategy should include internal networking; you have to talk to the informal groups and their informal leaders just as much as you do talk to the executives and managers, maybe even more. The real business does not always get done in the formal “boxes and lines” structure.

Just as important are the aspects of desk research and external networking. To have a good risk management strategy and action plan, you have to know everything about your industry, markets, competitors, supply chain, alternative supply chain, global risks in a connected world and many more. Failure to adapt your business model to the ever-changing internal and external risk environments will lead straight to the corporate graveyard.

The future of risk management is just: “risk management through people.” You can have the best systems, great models and scenario analysis with elaborate dashboards; at the end of the day a person will take a decision.

Are your employees aiming at more than one target, or do you have a clearly defined risk for reward strategy and risk appetite statement to guide them? Business strategy and risk culture are parts of an interdependent system.

Start working on your success by training every employee with some basic risk management skills.

As my Moody’s colleague Sarah Tennyson wrote last year: “Enterprise-wide risk management requires a shift in the behavior and mindset of employees across an organization. To realize the full benefits of improved systems, tools and analytical skills, people need to learn new ways of perceiving situations, interpreting data, making decisions, influencing and negotiating.”

This was originally published at Zawya.