“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Yuchun Lee, VP and general manager of IBM’s Enterprise Marketing Management. He was previously founder and CEO at Unica.
When the “Four P’s of Marketing” were first developed by E. Jerome McCarthy in 1960, the world was very different. As marketers, we know them by heart — price, product, place, and promotion. But the only stores McCarthy’s model applied to were physical stores and the consumers it addressed were neither as savvy nor as empowered as people are today. The concept was primarily a one-way, product based communications approach, that took very little else into consideration. But as we all know, things have drastically changed. Today, every action we take must take the consumer into consideration.
So, let’s say goodbye to the old way of thinking, the old 4P’s and hello to the digital marketing mix:
Personalization: While the original marketing mix called for overarching decisions on product and price, today the real focus must be personalization. In other words, the old days of batch and spray marketing are over. Chief Marketing Officers (CMO) can no longer afford to market to a demographic, but instead must personalize their offerings and market to the individual, finding the right product and the right price for each consumer. And many companies are beginning to do just that — relying on fine grain segmentation and personalization that drill down to the individual level based on previous customer purchase and digital engagement behavior, from all channels including mobile devices, web sites and in-store. These insights help determine what decisions make the most sense. To bring personalization to marketing, it’s critical that CMOs and chief information officers work together to identify and implement those technologies that allow them to analyze and utilize consumer data to create these personalized messages. Personalization is about being relevant to the customer and providing them just the right mix of what they’re looking for 24/7.
Persuasion: When it comes to arguably the most popular of the 4 Ps, promotion, this technique was all about selling. Today however, I believe persuasion is really the more effective approach. Persuasion is a softer, gentler form of communication with the customer, not a pitch. Consider the experience you encounter in a high-end retail store. The sales people don’t bombard you with deals and sales, but instead sit back and observe you as you take in the store. When the time is right and the sales person has a sense of what you’re looking for, they approach, providing information that helps you make the best decision – VERY different from the hard sell. In the era of the empowered customers, all companies should endeavor to provide this same experience both on- and offline.
Presence: While the 4Ps account for the various brick and mortar stores operating around the world, they do not account for the millions of online and digital stores that exist today. Now, it’s less about where traditional brick and mortar stores should be located geographically and more about presence. Of course store location is still important but now we really need to pay attention to our digital and virtual presence, making sure we are where the conversations are taking place. This means we need to be present on social networks, where consumers are sharing their thoughts and opinions about our brands. Marketers also need to be aware of the online destinations of their customers and then be present when they are interacting with each other about the brand experience, researching their next purchases and more.
Permission: Perhaps the most foundational and new aspects of today’s 4Ps is what I call permission. When advertising based marketing was first established some 60 years ago, permission wasn’t a consideration, nor was it relevant. However, today businesses can deliver highly personalized communications to customers anywhere and at any time. While the marketing opportunity is huge, it’s more intrusive and personal than ever. Without customer permission, marketing messages will be ignored, filtered and ineffective. As consumers continue to grow ever more powerful, we can all forget about marketing if we’re not operating with the basic understanding that every piece of data we collect requires implicit trust and the attention customers give to us is valuable. With our customers’ permission and our ability to, in return, deliver relevant messages that feel like a service to the customer, we can then achieve the ultimate goal of marketing.
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