Back in 1967, Philip Kotler created the highly innovative Four 'Ps' of Marketing. It significantly changed how companies approached product marketing and many financial firms have based their marketing on it for decades.
However, the shift to digital marketing has us asking: Is it time to re-think the 4Ps?
Why the 4Ps aren't right for today
How do the Four Ps work? It's quite straightforward:
- Produce the product
- Decide on the price
- Determine your target market and create the promotional campaign
- Deploy it through the correct media channels (the right place).
Seems simple, right? So why are we questioning the validity of the 4Ps in today's digital world?
Because even though there's been an increase in the number of highly efficient digital sales outlets, most data shows that the sales conversion rate for the Four P approach has been frozen at approximately one to three percent for decades -- since before the digital revolution.
So why isn't the Four P conversion rate improving in today's more efficient digital world?
Because it's a static model that isn't dynamic enough to respond to what the digital consumer is looking for.
It starts with the product and price and depends heavily on promotion. This runs counter to how most people want to research and purchase products online. People in today's information-heavy digital universe don't want to be pushed products they're not looking for. They want to find solutions to their financial challenges.
Gone are the days when financial firms could simply:
- Come up with a financial product (often replicating a competitor's offering)
- Price it based on competitive research
- Promote it with an advertising campaign developed through market research and focus groups
- Place ad for it in the media outlets (television programs, magazines or websites) the target consumer might be interested in.
Today, financial marketers can't just promote the products they have on the shelf. They must turn those products into solutions to client needs. They should start by listening to the financial challenges their clients face and package easy-to-understand solutions to them that can be explained using simple, flexible and effective messaging. Then they must optimize the placement and timing of those messages online to connect with the client and convert them.
Timing is critical in today's world of instant online financial gratification. In the days of the 4Ps, it was good enough to hope your television commercial or print ad would connect with your prospective client at some point in the future. Now you need to be in front of them with the right message about the right solution the minute they're looking for it online.
Perhaps a better marketing model for today is Challenge > Solution > Connection.
Challenge: Identify prospective clients who are facing a financial challenge
Solution: Deliver the information needed to help them find a solution to it
Connection: Make it easy for them to connect with your firm to complete the sale.
This is a more dynamic approach designed to respond to today's digital consumer needs.
New digital opportunities are rapidly making tried-and-true marketing methods like the 4Ps obsolete. If you need help evolving your marketing strategies to respond to the digital revolution, contact Carpenter Group. We can work with you to leverage the latest digital marketing strategies so you're well-prepared to connect consumers with your solutions when and how they want online.