The standard marketing mix developed by Jerome McCarthy in the 1960’s and known as the Four P’s — Product, Price, Place and Promotion is giving way to the Five C’s: Customer Value, Costs, Convenience, Customization and Communication.

Customer Value

Your service is the basis of any business. Make it better or different and customers buy it. Today, that means value — creating value propositions  which start broadly and then specifically emphasize benefits, attributes, or use. In the service business that often means starting by selling yourself and your personal credibility. Customers compare the benefit to the price to decide how much value they get for their money. Value propositions for products offer more for more (Mercedes), the same for less (Frys Technology), less for much less (Outlet Malls) and more for less (Toys ‘R’ Us).  There are also value propositions used in marketing professional services.  Online forums or newsletters are one example of how professional service firms provide additional value.  Some collect visitor email addresses and send them a monthly newsletter.  Some offer an added value for repeat customers such as free quotes, free follow-up, or money back on referrals.

In selling services, credibility clearly counts and is part of determining customer value. More often than not, the selected provider is the one who has most helped the customer to better understand the basics of what the field offers, their project and the benefits of using a professional. The smaller the project, the more dominant this factor actually becomes. To be able to have a chance of creating that understanding, it is vital to get a prospect to agree with you more than not. To establish agreement, you need to agree with him on many things... because YOU will need HIS agreement on several things in return. Among the more important ones are those basics on which the whole logic of using a professional builds on. Without these basic facts accepted and understood, he just has NO REASON to hire you...because He sees no reason for it. By making sure that the prospect consults you when he determines the FACTS OF HIS  PROJECT so that those FACTS that he comes to consider his own trust clearly prove to him that using your service is in his own best interest . . . . then you get a sale.

Cost

Price includes discounts, allowances, payment terms, and has traditionally added a "markup" in cost-based pricing. Value-based pricing determines price based on costs -the estimated value that the customer receives. For example, it doesn’t cost a theatre company more to put on a production for people in balcony seats or orchestra seats but those people receive a higher value for their purchase (a better view) and pay a higher price. In the service business, value-based pricing often means having the ability to bundle or unbundled services in conjunction with other professionals in the field.  One example of this is the recent strategic partnership announced here in Nevada between Rider Hunt Levett & Bailey and Primavera Systems.  Rider Hunt is one of the larges professional construction cost and development management firms in the world.  Primavera is the leading provider of project management, control and execution software and services in the world.  In announcing their partnership earlier this month, they made available to their customers all of their services which together maximize return on investments by speeding time to market as well as minimizing risks.

Convenience and Customization

Place - how products are distributed and made available to customers-is being influenced by customization and replaced by convenience. Some companies respond to the demand for customer-level marketing by offering customized products such as bicycles and automobiles to order. Others combine standard modules of products or services so as to attract niche markets or target customers. Customization need not stop there. Customer relationships are customized by selling two or more related services together or by unbundling services from one another.  Firms also offer customization with individualized services and a choice of who is on their team, by special design features or by tailoring the timing, choice in methods of service delivery, by enhancing ancillary services such as customized service packages and warranties, and customer-design of  payment terms and formatting invoices to customer liking.  Today’s convenience and customization is often enhanced through a webpage and its taking advantage of the internet’s customer-centric environment. Online marketing has the ability to provide unlimited availability, information controlled by the customer, digital distribution and downloadable products, services and incentives.

Communication

Promotion has always meant advertising, public relations, sales forces and direct marketing. Today, communication means two-way continual conversations through dialogues, interactive web sites, and call centers. Customers help themselves by downloading products like software from Cisco Systems. They do it themselves: Charles Schwab’s interactive trading site boasts more than 1.2 million customers. They design their own products at iPrint, a virtual printing and stationary shop where all customer transactions, including designing, ordering and proofing are done on line. They crate banner ads and virtual communities.  Sales forces are enhanced through the automation of record keeping and lead generation and often by being available 24-7 via cell phone.  This constant communication is increasingly tailored by customer niche and to specific generations that have a unique set of characteristics and can be categorized by the way they act, speak and belief systems.  There are four generally accepted generational categories that most marketers today tend to focus on. They include:

1. Millenials or Generation 2001ers, born after 1980
2. Baby Busters or Generation Xers born between 1965 and 1980
3. Baby Boomers born between 1946 and 1964
4. Mature Citizens born between 1909 and 1945

In order to market effectively to a generation you must find a way to grab their attention, by using a message that resonates with them. Generational determined lifestyles and social values exercise as much influence on buying and purchasing as more commonly understood demographic factors like income, education, and gender do--perhaps even more. To succeed in this communication requires that we understand how the motivation of customers and clients correlate with the underlying values of their generation so that  we are able to customize the message to cater to the generation when it comes to our services. The message then communicates directly to their needs and desires. Since every generation ultimately passes through the same life stages, from youth to old age, planting a seed with the soon-to-be-powerful demographic in order to build brand loyalty so as to reap the results as they become decision makers.  That is why we see increasing attention on the Generation Xers and Millenials and their characteristics.
Of course, every generation ultimately will pass through the same life stages, from youth to old age. As the younger generations find their place in society as consumers, employees and parents, it becomes more and more important for businesses to acknowledge this soon-to-be-powerful demographic. Build brand loyalty with them now, and you may reap the results for the rest of their lives.

Word of Mouth Marketing and Marketing Maven 2007

What is Word of Mouth Marketing?  To me it is sales by endorsement.  Now that endorsement need not be face-to-face, but for Word of Mouth Marketing to truly be effective, some face-to-face interaction is critical particularly between your business and the person making the endorsement.

It has been said that Word-of-Mouth Marketing is thousands of times more powerful than conventional marketing.  Why?  The average person is exposed to 200 to 1000 sales communications a day…but responds to a commercial communication once every few days.  When a friend makes a recommendation, we know that you will act on it at least one out of five times.  And that is one reason why Multi-Level Marketing works.

Why is Word of Mouth Marketing so effective?  Well, when we are bombarded with information, we just simply don’t have the time to sort through it all.  We look for and rely on third parties that we trust to tell us who we can trust, what is important, and what we should do.  Getting a recommendation from a reliable third-party helps customers speed up the decision-to-buy process.  That conversation is normally Expert-to-Expert. . …Expert to peer . . .or peer to peer…. and each conversation will be different just because of who is involved.

While not all of Word-of-Mouth is generated as a result of an initial social or business interaction, a substantial amount is.  Let me give you some examples.  You eat out at a restaurant and the meal is very bad.  The chances that you tell someone about the meal at the restaurant are very, very good (80%).  You eat out at a restaurant where the meal is O.K. – nothing spectacular but O.K.  Do you tell anyone?  No, the chances are very, very good that you don’t talk about it at all. (90%) The next day, you eat at a restaurant that exceeds all your expectations.  You leave saying W O W!  Wow experiences are what all of us want to achieve because when you leave, you are not only likely to tell a lot of people about it (90%) but you will also return and you will bring people and refer people to the restaurant.  Hence, the saying in the restaurant business:  You are only as good as your last meal served!

I’m here today to say . . .that if you do nothing else than find a way to give your customers more of a W O W experience, the cost of lunch today will well worth the price. 

Creating a WOW experience means exceeding their expectations and that requires that you truly know your customers. . . build a relationship with them so they become surprised by the quality…the quickness…the price….the personal attention…and even the professionalism that they receive.  Next, get your customers to talk to you and about you,  because of something astonishing that they received…some small act of kindness that is usually inexpensive. . .like taking the time to show a customer exactly where the bus stop is or putting one fresh flower instead of a plastic one in their room or on their table.
Finally, seek out complaints.  Not by simply giving them an evaluation form, but asking for feedback. 

As one great retailer (Marshall Field) has said:  Those who enter to buy, support me.  Those who come to flatter please me.  Those who complain teach me how I may please others so that more will come.  The only ones who hurt me are those who are displease but do not complain.  They refuse me permission to correct my errors and improve my service.

Who are targets for a word-of-mouth campaign?  In my experience there are five.

The financial community or whoever backs your company because they know what the company is doing and believe in it.  Industry Watchers who sort out and publish information on what is vibrant and valuable.  Customers who leave after having a W O W experience and who have been involved in new-product-tests or in sampling through trade-shows or training or conferences.  The Press who are listening for news and have networks to pick up conversations about what is working.  The selling chain who sell, represent, distribute or retail for you and are able to generate enthusiasm because of their commitment to you.  The Community who interacts with you if only to be interviewed for a position because everyone who is introduced to you and your company walks away with an impression.

All you really need is a story.
Getting across the right message to the right people at the right time from the right sources and in the right sequence can be a very difficult task.  One device makes it simpler:  the story.  In order for a story to be effective it has to be:

Short and Simple

• Interesting, Exciting, New, Different, Unique
• In Story Form
• True

It starts with research.  In its most simple form, a professionally moderated focus group where customers and separately, employees and salespeople are asked four questions:

1. What would you tell a friend?
2. How would you persuade a skeptic?
3. What questions would you anticipate from a skeptic?
4. How would you answer their objections?

Constructing a Word-of-Mouth Campaign takes:

• A superior product or service.  If you don’t have it, create it.
• A way of identifying and reaching the key influencers in the marketplace.
• A team of experts who are willing to go to bat and speak up for you.
• Enthusiastic customers who can attest to how wonderful you are.
• A way to reach the right prospects.
• A compelling story that people will want to listen to and will remember.
• A way for people to have direct, low-risk experiences with your product or service, perhaps, through demos or sampling.
• A way to reduce risk such as a money-back guarantee.

I have experience doing such research and helping companies launch Word-of-Mouth Campaigns that compliment what they are doing already.  Today, I wanted to give you something to take away with you that could work regardless of whether or not we get involved. 

First Steps – take one new service and ask these questions:

• Am I devoting 75% of my marketing dollars and energy to activating a word-of-mouth network?
• Are all of my salespersons devoting a specific and sizeable share of their time to user network development and expansion?  Are they compensated for doing so?
• Is every employee a conscientious network developer among his or her colleagues?

Based upon these answers, you can develop a 60-day word-of-mouth blitz targeted at a few key progressive customers to relaunch or enhance your product or service acceptance.