Mind Your P’s and E’s!
I’ve always been an ardent admirer of the Midshipmen, the football team of the U.S. Naval Academy in Annapolis, Maryland. Every single student is on a full academic scholarship (there are no athletic scholarships at any of the service academies!), must graduate in four years and makes a commitment to serve on active duty in the Navy for a minimum of five years, so the potential to play in the pros is almost non-existent. Every USNA football player carries a full class load and must participate in mandated extracurricular drills and activities, making practice time a fraction of what other Division I teams they face have.
The Middies play for the love of the game and their passion is evident every time they step onto the field. Despite the odds, they had a 9-4 record against many ranked teams in 2016. What’s their secret to success? With all of the competitive disadvantages they have, they recognize that they have to keep things simple; they are a classic example of the old adage that a simple plan well executed is superior to a fancy and complex plan poorly executed. The Midshipmen follow a simple game plan and are masters of the fundamentals like blocking and tackling, relying on speed, teamwork and excellent execution to counter their opponents’ paper advantages.
Retail used to be based on relatively simple principles. If they were well executed, you had a good chance of being successful. From a marketing perspective, the core principals were the four P’s:
- Product (what is actually sold)
- Price (what the product is sold for)
- Promotion (how customers find out about the product)
- Place (where the product is sold)
In today’s omni-channel, dynamic and consumer-centric, ultra-competitive world, these simple fundamentals that we’ve focused on for years haven’t changed, but their scope and breadth definitely have. If you’re able to execute well on the “new” marketing basics, there’s a high likelihood you’ll not only stay in the game, but also experience future success.
Here’s what the new P’s look like:
- Product: It’s not just about physical product, it’s also about providing the positive experiences that your products provide. It’s about providing the solutions to the consumer, and delivering success and satisfaction and improving their quality of life.
- Price: Old school, this was strictly about retail selling point; new school it’s about the value, the perceived worth of a product as seen through the consumers’ eyes. It’s critical that we communicate and demonstrate the real value (read experiences and personal benefit) to enhance our high value image. Interestingly, many of the folks in our industry who establish the retail price points (the retailers!) are underpricing our products when they establish price points based on a profit formula, rather than basing the price points on a consumer value proposition. Consumers will pay more for what they perceive (and we effectively communicate) as better value.
- Place: Today’s consumer expectations are predicated on those established by other omni-channel competition. They want to purchase when and where they desire, whether in the physical store or
the virtual store, on their terms, not yours. The consumer is driving the terms of your relevancy to them, not the other way around.
- Promotion: We’ve become conditioned to promoting stuff at a price, but that doesn’t do justice to demonstrating the true value of our products and the experiences we can provide. Look at promotion as a means of educating and communicating, telling your story about your business and the products, all of which helps to enhance the real and intangible value you deliver. And weave all of this into an integrated, consistent and engaging multi-media approach, utilizing traditional print and broadcast media with social media and digital marketing programs.
- Over the years, I’ve added a few more P’s to this model, elements that can help set you apart from the big box competition, elements that they would find difficult to compete against, providing you with some competitive advantages … people, passion and pride!
As an industry, we’re still in the process of transitioning from a transactional to an experiential business model. Many of our potential customers, including millennials, view our products as an affordable luxury, and the traditional four-P approach doesn’t address or sync with their needs or behaviors. Brian Fetherstonhaugh of PR giant Oglivy & Mather proposes a new formula, the four E’s, is needed to better communicate and deliver meaningful value to this consumer.
He suggests that:
- Experiences Replace Product: Getting up close and personal to understand the needs and feelings with the customer to understand the special experiences they get from the brand (your store) and the products you offer.
- Place Becomes Everyplace: Allowing this customer to engage with you and your products on their terms, not yours.
- Price is Exchange: To these customers, price is just a component of what the customer really seeks, value! Absolute price takes a backseat to value, when they can identify what the real value to them is.
- Promotion is Evangelism: Becoming true believers and millennials being social communicators relying on peer endorsement, if you’re successful in engaging this customer in the first three E’s (Experience, Everyplace and Exchange), they can become active and vocal advocates for your business. And Word Of Mouth endorsement and promotion is the strongest, sincerest and effective (and least expensive) communication vehicle.
Now is the time to re-examine your marketing strategies, re-evaluating how you’re applying the expanded 4+3 P’s and the new 4 E’s as you look for the best ways to engage your current and potential customers!
It’s time to mind your P’s and E’s …