I was reading an article in the recent Forbes online CMO Network by Kimberly Whitler entitled: What are the top predictions for marketers heading into 2016? Ms. Whitler surveyed some experts, including CEOs, Presidents/GMs, CMOs, authors and executive recruiters. In a different but recent article, Forbes CMO also ranked the top 50 CMOs. To me, I would have rather heard their predictions.
I always enjoy reading “predictions” because they keep me on my toes- maybe I missed something- and makes me challenge what I believe are the upcoming trends. As a businessman and marketer I certainly don’t want to be caught short.
Yet, I found the article very interesting and certain worthy of consideration. I believe that each person is looking at the "elephant" from their unique vantage point. And frankly, I am not sure they are predictions or wishful thinking based on the viewpoints of the interviewee. Nevertheless, they are certainly food for thought.
From a holistic view, my prediction - or wishful thinking - is that marketers need to start with the customer and realize that marketing has become multi-channel and multi-dimensional. The smart CMO must orchestrate the new marketing mix. That means they need to simplify messages sent to consumers through whatever channel is relevant to them i.e. digital, small screen, large screen, Point-of-Purchase. And they need to determine which is most relevant for the target personas. Moreover, the smart marketer should consider all the tools in his/her toolbox and select those tools that are most effective for getting the right message and INTERACTION with the customer.
When I put this together, i find that the old model of 4P’s is antiquated. I believe the new prediction is that good CMOs are now considering 7Ps in a holistic view: the original 4 (Product including product/service development, Price, Promotion, Placement (digital or traditional), and the new three consisting of Process (including customer engagement, referral and loyalty), People as brand messengers at point of purchase or via customer care, and Personalization (through technology and the internet).
The “traditional” 4Ps of marketing are well known. In the day, marketing was about creating demand, and to a large degree it still is today. But the focus was on selling a product to meet a need. In general, promotion was based on advertising push. The marketer’s mantra was to shout out the virtues of the product by mass advertising. To some who read the history books, the “soaps” on TV were called that because the consumer goods manufacturers such as Tide, All, and Fab were sponsoring and advertising on the TV shows aimed at the housewives and other stay at home folks.
Pricing was simple. Manufacturer’s set price and used a price point philosophy of good, better, best. Placement represented where the consumer could buy the product i.e. at the neighborhood store or a mass retailer or even door-to-door sales and home delivery.
Because of technology such as the internet, and the movement away from a manufacturing to a service company, even the original 4 P’s have changed.
Product à Solution
Promotion à Information
Price à Value
Place à Access
Consumers and businesses want solutions to their problems and want to understand how the product/service will perform. Due to the internet, both as catalogs of information and online reviews that are omnipresent through a myriad of sources, information has replaced pure promotion. Certainly consumers and businesses want to find the right product at the right price, yet price by itself has been replaced by value with the value add sometimes being generated by service agreements and extended warranties. And primarily due to the internet, place (distribution) has increased to a multi-channel access. Think about the changes from the 1990s when e-commerce was first getting started to today. Consumers and businesses now have electronic exchanges and other online venues from which to buy goods and services. And now, coming full circle, we see Amazon opened its first brick and mortar store in Seattle.
Now let’s add the new three elements to the marketing mix. First is the element of PEOPLE. When I was head of marketing at US Cellular, we changed our brand and positioned our company using the tag line “the way people talked around here.” Why did we do that? In part, we recognized from our research in the late 90s and early 2000s that customers in our market wanted something more than what other cellcos offered. We were not going to be the most technologically advanced (although our network and engineering were superb), nor were we going to cover the most customers in the country. What our customers wanted was a relationship with our company, represented by our front line sales and customer service people. They wanted a company they could trust. At that point, we realized that people were the brand messengers and in our touchpoint marketing system, represented a way to affect the relationship and alter the buying habits of our consumers. And it worked. Our retention rate i.e. loyalty, was the best in the in the business.
The second new element is PROCESS. Many companies loathe the word process because they feel it is bureaucratic. To me, process is the mechanism for repeatability. We want processes to help the customer in building its relationship with the company and also empower the employees to do their job to satisfy the customer. Clearly, it is a tricky balance! The processes today – mostly enabled by technology- relate to tools that help the company serve the customer.
There is a dizzying array of tools that the marketer has to understand and use. See Marketing Technology Landscape by Scott Brinker or some of the Lumascapes by Luma Partners. Some of these tools include ways to mass customize a product or service to the customer needs. Witness the new companies entering the market to build relationships with consumers and business buyers. There are processes enabled by digital and web technologies that enable social engagement and the marketers use these new tools to build and maintain relationships with their customers. This improves value through new services and interactive engagement in the eyes of the buyer.
The final area is PERSONALIZATION. Several of the interviewees pointed out that understanding the customers’ persona is critical to segmentation. Once you understand who they are, the company has to satisfy their unique requirements. I have always been a fan of mass customization (read Joe Pines original work) or macro-niching as I use to call it 5 years before mass customization became vogue. Personalization is easy today with technology. You can see it when you buy a car. Go into a BMW or Jaguar dealer in their store or online and the system will build the car for you. Buy a house from Toll Brothers and you get a platform and options to tailor the house to your needs. Go on the web and find a case for your smart phone and you can easily customize it with your school logo and colors. Consumers want to feel special and that ensures a solid on-going relationship with their customers.
Marketing has changed and will continue to evolve over the next several years. Clearly there will be a natural bonding between the CIO and CMO as marketing technology has become more important in defining the marketing mix. While Ms. Whitler did not ask my prediction for 2016, I will share it with my readers. I predict that marketing will be more about the customer and the great marketer will find the right combination of the 7 elements to build and sustain relationships with that customer. At least I hope so.
I would be glad to continue the dialog or share additional thought.