Why Payment Belongs With Product, Price, Place and Promotion as a Key Decision Lever
The smartest of marketers have developed and relied on an offer taxonomy based on the four "p's" — product, price, place and promotion — for the last 50 years or so. For years these four p's have helped marketers measure, classify and optimize different offers against one another based largely on these trigger points, allowing for an organized and optimized marketing mix that drives revenue with the most efficiency. And that taxonomy (i.e., the process of determining how all the offers from brands should be broken down into distinguishable pieces) has held its grip on the marketing industry.
The four p's are the levers that each marketer must use to optimize sales when taking a specific product to market. These offers (let's say within an email or banner ad) generally communicate parts of the various elements of the four p's. What is it about the product and its features that make it of interest to me? What is its price, be it a retail price or a sales price? And does the specific pricing strategy include additional incentives like free shipping? Where can I get it, and at what times? And finally, how are the other elements of the 4 p's being communicated and, perhaps more importantly, messaged to the desired customer through paid, earned or owned media?
Over the years, many academics have attempted to expand on, modify or completely change the marketing mix beyond the 4 p's. A good overview on these efforts is outside the scope of this post, but can be found here. Until now those simple p's have reigned supreme, but should that change?
Ron Shevlin of the Aite Group (a respected colleague of mine) recently postulated in his great series of blogs, correctly entitled "Snarketing 2.0," the need to add "payment" to the marketing mix. He argues that there's "growing evidence that the choice of payment methods available for a particular product can influence a customer's choice of product — regardless of the price. This would qualify payments as a lever (or fifth p) that marketers can manage.