From the “4Ps” to the “4Es”: Why Luxury Marketers Need a Different Formula
Whether you are working in the marketing industry or just took one Marketing 101 class, everyone has heard of the 4Ps of marketing – product, price, promotion and place. We marketers have had this drummed into our heads by professors and textbooks more times than we can count. I certainly understand the importance of the 4Ps, but felt it didn’t always apply – especially to the luxury market. Then I read this article by Pam Danziger from Unity Marketing, which confirmed all my doubts about the 4Ps. The article, called “Luxury Marketing’s Higher Calling – from the 4Ps to the 4Es,” explained what luxury marketers need to grapple with as our culture goes through an anti-consumerist phase and the affluent change the way they “buy” into things.
To survive in an economy that looks completely different than it did 10 or 20 years ago, luxury firms or brands need to focus on being meaningful and inspirational rather than subscribing to the old marketing standards. That’s why Danziger came up with the 4Es of marketing: experiences, everyplace, exchange and evangelism.
I’ve recapped these 4Es below:
From Products to Experiences
In the new experiential economy, consumers—particularly millennials—are spending their money on experiences instead of tangible goods. Essentially, shoppers prefer to take a selfie while they enjoy their latest splurge rather than display that splurge on a shelf. Of course, this shift has been great for spas and fine restaurants, but companies in the business of selling a product aren’t off the hook. Take a note from companies like Stich Fix, which sells clothing by offering customers a personal stylist, or Laudi Vidni, which engages shoppers by giving them the ability to customize the material and style of their handbags.
From Place to Everyplace
Brick and mortar has been in a state of demise for quite some time now. Online shopping has surpassed traditional retail and has emerged into the idea that a brand needs to be wherever the customer is: in-store, at home, over the phone and online. Luxury marketers in particular need to go even further to make everyplace “meaningful and memorable,” as Danziger puts it. She cites J. Hilburn and Lincoln Motor Cars as two luxury brands that have successfully embraced the everyplace concept. J. Hilburn offers customers the chance to meet with one of 3,000 stylists across the country to do a personal fitting, and Lincoln provides a pickup service when customers need to take their car in for repairs. These brands go beyond typical customer service and almost serve as their customers’ personal assistants.
From Price to Exchange
No longer can a company slap a brand name on a product, mark up the price and say it’s aspirational. Luxury brands need to provide customers with a valuable exchange—and affluent consumers will be willing to pay for it. Whether that exchange provides the customer with expert knowledge, appreciation or time savings, it has to make the customer feel like they’re getting something that enriches their lives. Socially conscious companies that allow customers to give back with every purchase are particularly good at this. Danziger mentions TOMS’ and Warby Parker’s “buy a pair, give a pair” model as an example.
From Promotion to Evangelism
If customers want meaningful, life-affirming products from their favorite brands, it’s no wonder that they can become fanatical when they actually get them—and that fanaticism is a powerful promotional tool. These days, many luxury companies are seeing significant results through “brand evangelism” (otherwise known as good, old-fashioned word of mouth). That doesn’t mean there’s no room for traditional advertising, public relations or endorsements, but there’s no question that word of mouth drives sales. Danziger mentions Apple, a classic example of a company that turns its customers into evangelists (and makes quite a profit from those loyal customers).