For the longest time, marketing gurus have regarded Philip Kotler’s work as their Wikipedia. A ten minute talk by him about marketing in any business school quickly makes business headlines. Kotler’s literary work, from the ‘Principles of Marketing’ to his latest ‘Confronting Capitalism’, all made best sellers and are often regarded as the bible by marketing professionals globally.
His doctrine of the four P’s of marketing — Product, Place, Promotion, and Price — is often used as a yardstick in modern day marketing and since the advent of services, marketing gurus have added two more dimensions, namely — People and Process. However, an analysis of the latest developments has raised a significant question — is there another essential ‘P’, that needs to be added to bring his work up to speed? Predictive Analytics. It has emerged as a revolutionary tool that brands are using to acquire customers and conceptualise the most profitable way to sell goods and services.
Indeed, recent news about some companies like Lattice Engines is very promising. They have effectively used predictive analytics engines to drive sales, revenue growth and the bottom line for big brands globally. But what is more exciting is the way it changes the entire customer lifecycle and the extent to which it affects the branding of the company. They use a mix of internal data with external buying data to come up with customer behaviour useful for the company to target new customers, in addition to cross selling the products to existing customers. For brands, this is clearly changing the way they conduct business and in short, sales and marketing are efficiently automated.
While this is a big deal for brands, it has even more potential if seen from the customer end. For buyers, this is a huge change in the way they buy or use the products or services. They not only get the right products, but can get their product recommended before they know they need it! Seems imaginative? But it is already being done.
Another insight predictive analytics provides is the way advertisements are perceived by customers. In an era where advertisements can be perceived as nuisance, predictive analytics helps brands reach customers with beneficial advertisements in the form of conversations instead. In short, consumers will see what they really like and cater to their needs.
Predictive analytics has also provided highly customised and personalised products and services. Customers get exactly what they want different from standard products which is a boon for brands allowing them to charge premium prices and score better margins. This trend potentially changes the way brands communicate with and reach customers.
Predictive analytics has already helped in discovering new energy sources, scoring consumer credit, assessing health risks, detecting fraud and targeting prospective buyers.
This now builds a new customer lifecycle namely – customers can now enter into conversation with brands to know the latest products, while providing feedback, and the brands use this to target customers effectively. Not just a win-win situation but a ‘better-still better’ way of living life.
However, there is bad news for traditional customers as well. Those who on the sidelines of this digital revolution are going to lose out on a whole range of customised products, personalised services, better deals and above all the entire experience of digital marketing. Undoubtedly though, predictive analytics will change the world, and this revolution is already happening.
So don’t be caught off-guard if you find an 8th P-term in your next Kotler work.