Originally published on LinkedIn
The classic ‘4Ps’ of marketing served companies well for decades.
They came courtesy of American college professor Jerome McCarthy in the swinging 1960’s – think Mad Men and you won’t be too far off the mark. Imagine working back then on Madison Avenue: grey suits, mini-skirts, vodka martinis before lunch and dreaming up ways to create demand with a new exciting profession called ‘Marketing’ to manage Product, Price, Place, and Promotion.
But do the 4Ps hold up in 2016?
The classic 4Ps still have their place, but it’s time to review and complement because we live in a pretty exhilarating, digital-first environment these days. There’s a new blurring of online and offline culture where things happen quicker, we no longer wear grey suits and drink vodka before lunch, instead working flexibly by tele-commuting in our PJs. These days, ideas go global at massive scale well before midday martinis!
Today, 50% of 18-29 year olds get their ‘news’ from social media and apps, and they live on their mobile phone checking it 150+ times/day. YouTube search is rivalled only by Google illustrating the growing power of video, and lastly, even 75% of business decision-makers use social media to research products and suppliers.
All this is changing business. Just look at the way Airbnb completely disrupted the hotel industry. Or the way Red Bull creates wild social content to generate a Facebook audience of over 42 million. Or how a little Australian tech-startup called Canva started selling online graphic design tools… and in a few short years exploded into a business valued at $US165 million with a user-base of five million customers across 179 countries.
That’s a huge shift, and an exciting opportunity too. So yes, it’s definitely time for a refresh on the Ps, an update that’s more relevant and more in tune with right now. Let’s get into it.
Here are 5 new Ps to define success in today’s digital-first marketplace:
Plan – it’s all about the data
In the classic P era, we didn’t have enough research. Today, we’re swamped with it. Don E. Schultz, a professor of integrated marketing communications, calls it a data tsunami. It’s critical that we plan for how we deal with “the cascading mountains of information about markets, products, consumers, retailers, and economic conditions”. I’ve previously written about how every month Lenovo uses data insights from 700,000 customers to help improve everything about our own products and services, and that’s just the tip of the iceberg. To quote Professor Schultz ‘‘With massive amounts of data pouring in the door continuously, you don’t need analysis as much as you need understanding that will lead to insights. The answers today are all in the data, and, for the most part, that’s behavioral, not attitudinal data. It’s how you read the data and respond that really counts.’’
For marketers this means that a deeper planned approach starts with data-led customer understanding; from determining what information they need, an assessment of the value of the data, and then identifying how individual customers can be targeted and acquired.
Perform – it’s all about customer experience
How do we meet the needs of our customers and the business? To me, that’s what great performance means. It follows – often, but not always – that if we meet and exceed our customer needs, the business will be doing just fine.
Back in the Mad Men era, customer relationships were historically owned by the sales and service functions. These days the customer experience has many new touch points with a company or brand, so marketing leaders now have greater responsibility for the customer journey.
Alex Allwood has a great book on the subject I read recently simply called Customer Experience is the Brand. In it, she positions customer experience today as “the perceptions customers hold, resulting from every digital and physical interaction before, during and after purchase”. What’s also changed is the customer interaction with ‘Marketing’. Traditionally, the customer experience was built on transactional marketing practices such as discounting, promotions and merchandising. In the experience economy, however, these offers provide diminishing competitive advantage because they are easily replaced with a competitor’s offering and they deliver low advocacy.
In the new digital age, brands will only succeed if your entire company pivots to a customer-first culture where customer needs are met consistently, brand promises are kept, and each point in the customer journey delivers a positive experience which creates brand advocacy – and ultimately – brand fans and ambassadors. In this respect, marketers own much more of the customer journey in today’s economy, and I’d argue are the only ones in most companies who can map and track the customer throughout the pre-purchase, purchase and post-purchase cycle.
The researchers over at Forrester have it right: disruption is the new normal, and the way forward is transforming into a customer-obsessed enterprise. Personalised customer experiences matter a lot, and in 2016, the gap will widen between customer obsessed leaders… and customer laggards.
Practise & Pioneer – it’s all about attitude
Well… technically that may be 2Ps but the important thing is to always try to improve, never accept the status quo, and don’t accept your last iteration as your best. Celebrate for a nanosecond…and then move on. This may mean incrementally practising your craft to improve (like a Japanese Kaizen approach) OR taking big leaps and risk by pioneering something new. But it all starts with the same attitude.
The brilliant thing these days is you don’t have to invest all your budget into one high risk campaign that succeeds or fails. It’s a digital world, so you can do A/B testing with multiple variations of your design/creative/call-to-action, optimising on the fly or testing to find out the best ROI before committing greater investment into any marketing activity.
At Lenovo, we’ve been completely driven by the attitude “never stand still”. It keeps us on our toes, and switched on with the right mindset. Practically (and not too surprisingly), this often comes back to how we use data.
For our own part, our data-led digital and social strategy two years ago was pioneering: put 80% of marketing into digital and social (unlike the competition), ‘breakout’ as a new challenger brand for the Australian youth market with >20% ‘share of voice’ in the PC and tablet category, and launch a premium product with the Lenovo ‘YOGA’. This risky approach helped increase our brand awareness from 8% to 46% in the past two years, putting us on track as the #2 brand purchased this 2016 holiday season. This was not random activity, rather it was done after testing to see what worked best and got the greatest response. That was great, but now the next step is to get to 70%+ and do so by practising, improving and continuing to pioneer… watch this space as we continue this journey.
People – it’s all about having a great team
Unfortunately the days of Mad Men, cocktails and intuition are mostly over and the ‘classic marketing’ taught in universities and colleges are now behind the times. That means the number of people trained with all the skills needed to thrive in this new marketplace are limited.
The people we need in our organisations during today’s disruptive phase are renaissance people – those who can innovate, explore and push boundaries while understanding the digital marketplace. From experience, I think these people will come from those who grew up with technology embedded in their lives, the millennials, those digital natives who will be educated with several interdisciplinary programs, mixing analytics with consumer understanding and fast ‘real-time’ response-driven communication skills.
For those of us who aren’t millennial (sigh), it means a big retraining for us on the new digital economy. This retraining needs to be at ALL levels of a company from the CEO down. Senior marketers got where they are today by mastering traditional marketing and organisational skills, but those aren’t enough going forward. Senior managers must learn from the newbies if they and their organisation is to survive.
Original Ps vs New Ps
As I mentioned, the original 4Ps of marketing still contain indispensable basics for marketers: Product, Price, Place, and Promotion.
My thinking is less about replacing them, and more about complementing them for today’s always-on digital markets with new advice for marketers and managers: Plan, Perform, Practise & Pioneer, People. These can and will evolve as exciting new changes and challenges present themselves.
And personally, I’m completely pumped for the next phase of the digital marketing revolution!