The Value of Marketing

A letter from Russ Klein, CEO of the American Marketing Association

I was recently honored to be a speaker at the Global Conference on Creating Value in New York City, and I had the pleasure of introducing Philip Kotler, the father of modern marketing. Kotler has become a dear friend over the past five years, and we met over Chinese food the night before our speaking engagement. I had so many questions for Phil, but I barely had a chance to ask any because I was answering all of his! I told my fiancé that I was disappointed I didn’t ask my questions, but she wisely responded, “That’s how he became so smart.”

My speech at the Creating Value conference included a reimagined version of the venerable 4 P’s of marketing that many universities still teach today. The framework has been reinterpreted, evolved and expanded by many. Most versions meet the test of reasonableness and some are managerially useful adaptations in response to the changing role marketing can play in society.

I’m not an “If it ain’t broke, don’t fix it” kind of guy. Things don’t have to be broken before they can be made better and more valuable. This obvious fact is the basis for the first “P,” which stands for product. But try to reimagine “product” as “solution.” Nobody wants your product—they want your solution. Looking through the lens of “solutions” vastly widens the aperture for innovation.

When it comes to the second “P,” which stands for price, I believe there’s another element that may figure more importantly in your value equation: time. Think about the disruptors in our economy; most either saved or gave back time to their customer. Friction is a waste of time. Poorly trained customer service is a waste of time. Out-of-stocks are a waste of time. Slow page loads are a waste of time. When you look across consumer product and customer service data, you’ll find “waste of time” to be the No. 1 complaint.

The third “P,” which stands for place or distribution, is what I often refer to as the Cinderella of the 4 P’s. Long ago, marketers forfeited their seat at the table on supply chain and logistics because it wasn’t as sexy as storytelling. Marketers are addicted to storytelling as the panacea for every business challenge. Now, thanks to smartphones and other technology, this “P” is about unprecedented insight into context, around-the-clock access and real-time immediacy. This makes it the most important “P,” which I now reimagine as “omni-channel” to mean all distribution and media channels combined into one powerful marketing muscle for creating customer value.

The fourth “P” requires perhaps the most important evolution. Instead of “promotion,” this element should be reimagined and expanded to “participation.” What I like about the term is that it aptly captures the new dynamic of customer engagement: a direct transaction, meaning a direct behavior or desired action by your customer; and an indirect transaction, measured by likes, followers, shares, feedback, etc. Without an indirect transaction with your customer, you only have revenue. Without the direct transaction, all you have is gossip.

The advent of social media has ushered in an expectation by brand owners that they don’t just want purchase behavior, they want positive social affirmation as a complete expression of an engaged customer. Conversely, consumers don’t just want to buy, they want to be understood. By thinking of the opportunity in terms of participation, you ensure the customer’s voice is actively monitored and understood. Ideally, it leads to inspiration for co-creation.

My new acronym is S.T.O.P.: Solutions, time, omni-channel and participation. My advice is to STOP using the 4 P’s and start reimagining your brand in this way.

In the end, done right, the value of marketing will evolve to a world where everything is bought and nothing is sold, a world where marketing has less to do with buying and more to do with belonging.

Only then does the field have a fighting chance to reverse the decades-long decline of trust from consumers and CEOs alike.

Kotler’s first words on stage after my presentation were, “Russ Klein just crushed the 4 P’s!” That’s an endorsement I will treasure all my life.