The New 4 P’s of Marketing: Place of Distribution = Customer Experience
Let’s say you need a new pair of jeans. You have a plethora of retail choices, but let’s look at stores from two ends of the retail spectrum, Walmart and Nordstrom. Both of these brands are extremely well positioned. You know what you are going to get and they deliver on that brand promise every time. And, they both sell jeans!
What is the customer experience at these two fine retailers? Let’s go shopping. The Walmart near my house features that classic off-white industrial floor tile throughout most of the store. The exception is the clothing area where the floor is covered with a faux-wood laminate. The shelving is industrial as well. It is made of thick, heavy metal and more faux-wood. The ceiling is unfinished exposing the framework of the building.
There are big, bold colorful signs everywhere shouting the prices of the products displayed below them. You find the large series of fixtures, which display various brands and styles of jeans. They are all priced less than twenty dollars. One employee quickly walks by without acknowledging your presence.
Now, let’s shop your local Nordstrom. The main walkways feature real stone tile (possibly marble), while the areas housing clothing are covered with a quality and comfortable carpet. Most of the shelving is made of solid wood. You knock on it to admire the durability. The ceiling, like everything else, seems finished and put-together.
The semi-annual sale is in full swing, but the signs indicating the sale are small and do not offer pricing. In fact, it is sometimes a struggle to find the price tag on each individual garment to learn the sale price (if there is one). Regular-priced jeans average just less than two hundred dollars. Three employees have greeted you and asked how they can help you.
If you have ever shopped these two retailers these descriptions should sound spot on. No surprises. These companies know who they are and do a wonderful job of expressing their values through their customer experience. No frills equates to inexpensive, while polished and pampered equates to high-end pricing.
Now let’s have some fun. Denim is denim, right? We are going to swap an assortment of jeans from each retailer and offer them in the other.
What would you think if you saw a $199 pair of 7 For All Mankind jeans displayed at Walmart next to a $19 pair of Faded Glory jeans? What would you think if you found a $19 pair of Wranglers displayed next to a $199 pair of True Religion jeans at Nordstrom? You would clearly recognize that something was “off.”
Obviously, these jeans are recognizable to many fashion-conscious shoppers at their price points. So, let’s bring the jeans back to their rightful retailers, but assign them the opposite price point. The Wranglers are back at Walmart priced at $199, while the 7 For All Mankind jeans are displayed at Nordstrom priced at $19. Most people would ignore the elevated Wrangler pricing or assume it was a mistake. On the other hand, wouldn’t denim connoisseurs riot over a $19 pair of 7 For All Mandkind high-fashion denim if they were displayed in the classic Nordstrom setting with all the other denim choices? Of course not! The fashionistas would wonder, “what’s the matter with these jeans?”
In this example, the pricing (and probably the brands themselves) represent incongruent behavior by the retailers. When we swapped these products, they simply didn’t belong in the new setting. In fact, take the price comparison bias out of the equation. If you were to take the entire denim assortment out of each retailer and display them in the other, customers would be turned off. Walmart shoppers are not in the market for a $199 pair of jeans and Nordstrom shoppers assuredly wouldn’t value the Walmart brands.
The magic in this example is that we used product and price to explain customer experience, but we all know that customer experience involves every touch point between the customer and the brand.
Here’s a different perspective on customer experience using the same two retailers. Nordstrom typically features a pianist playing classical music on a grand piano during the holidays. How would that musician be received if we were to put him in the middle of a Walmart on the morning of Black Friday? He might not survive the experience. And, he would appear oddly out of place. That dynamic doesn’t work at a discount retailer because it does not support the experience that reflects the Walmart brand.
If you were to place a rock-style musician adorned in an ugly Christmas sweater in Nordstrom with a low-end Casio keyboard sitting atop a portable stand… let's just say security would quickly escort him away. That scene just wouldn’t support the Nordstom brand.
Distribution is obviously still a concern for business owners and leaders. However, the classic marketing “P” known as Place of Distribution is no longer about where your product or service is sold. It’s about the experience your customer has when dealing with your brand or company. Here’s the scary part. Every touch point your company has with a customer has the potential to make or break your brand. From the products, to the pricing, to the flooring, to the fixtures, to the ceiling, to the level of service provided by employees of the retail companies in the example above. Everything communicates.
We human beings expect congruent or harmonious behavior. We notice when something is out of place. You know that intuitive little voice inside your head that warns, “something’s off with this guy?” That’s your unconscious mind detecting incongruent behavior. This is true with both people and brands because a real brand is personified. Brands are given human characteristics in order to identify on a personal level with their customers. Without that connection there is no brand.
The first three P’s must be in synch. The customer experience is a reflection of the product (value) and the price (worth). When one of those elements is out of synch, they are all out of synch and your brand will be seen as inauthentic or phony. Something is just a little off.
The first three classic P’s—Product, Price and Place of distribution (now Value, Worth and Customer Experience) are your brand positioning. Without them there is no way to properly employ the fourth P, Promotion. That is the topic of my next post.
Until then, take a look at your customer touch points. Where is your weakest link? Is it an apathetic hostess, a rude sales person, a clunky website, the lack of a social media voice, a messy store, or a product that doesn’t meet expectations?
Customers typically don’t complain to the manager. They just find an alternative.
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