P is for Promise: Have you met the 5th P?
We’ve all heard of the core fundamentals of marketing which is based on the four P’s: Product, Price, Promotion, and Place. In other words, put the right ‘product’ in the right ‘place’ at the right ‘price’ and ‘promote’ it. (of course a public relations campaign wouldn’t hurt either) But in the efforts of many businesses to promote their products or services, many overlook what should be considered the fifth P which is the promise. It is an area of marketing that many businesses still struggle with either by failing to offer a promise or even by overstating their promises through clever marketing guarantees.
In the digital age and era of social media, the promise is more important than ever before as consumers seek out authenticity in their products, services, and experiences. If a business is prepared to make a promise or product guarantee, they must be prepared to stand behind it otherwise they might find their brand name or product travelling through cyberspace with a handle taken from another popular P: phony. Naturally, such negative word of mouth can spread like wildfire and can hurt a business severely.
For this reason, many businesses are afraid to offer a brand promise out of fear that they will be held accountable by consumers. There is a high amount of risk perceived in carrying such a policy. On the other hand, if the business is not willing to assume the risk, that risk is then perceived by the consumer who now faces a major barrier in trying out your product or service. That is why it is important that businesses embrace the idea of offering a brand or product guarantee as a competitive advantage. In short, promises have the ability to drive profits so long as they are authentic.
A Promise can be a Competitive Advantage
A major barrier in a consumer’s call to action to purchase a product or service is the perceived risk of dissatisfaction or that the product may be faulty. This especially rings true when one is evaluating a product that falls on the cheaper end of the scale. But an effective way to stand out from your competitors and circumnavigate this fear is to offer a promise or guarantee to your prospective consumers that will decrease their risk and ultimately, make the consumer’s purchase risk free. If you can reduce the barriers and threats associated with doing business with your target market, you can use the seamless and fun buying experience that you have created through your guarantee as your main competitive advantage.
The digital age has reduced the emphasis on the advertisement and raised the importance of the experience. Consumers want authenticity ahead of everything else and therefore a business, product, or brand must be what it says it is. The challenge with advertising is that consumers are now viewing it with greater skepticism as a result of constant let downs from various businesses. Advertising screams phoniness in the minds of consumers. How many times have you been to a hotel and the rooms did not look as they were pictured? How many times have you purchased a hamburger and the presentation looked nothing like the advertisement? If somehow consumers could jump inside an advertisement, the experience would be great but without that ability, the experience is in danger of falling severely short of expectations.
Failing to Keep a Promise will have Consequences
So why advertise qualities that you are not? If a hotel has 10% of their rooms renovated and uses photos of those renovated rooms in their advertisements while filling their hotel to capacity, 90% of their clients will form an attitude of indifference and leave disappointed. This can result in horrific consequences for business. That is when businesses overlook the value of the promise in marketing by overstating it to their consumers. According to Rob Walker, a columnist for New York Times Magazine, advertising agencies have concluded that the most powerful and influential tool in marketing is no longer television advertisements or billboards but rather the conversations we have in our everyday lives. Those conversations are now more powerful than ever in the digital age as social media makes our opinions and commentary public to the rest of the world and a company’s potential target market.
With the acknowledgement of the role that word of mouth now plays in marketing, it’s up to the business to decide whether they want to use that powerful marketing to deliver a promise and create a positive competitive advantage or if they want to suffer the consequences of overstating their promise and become a victim to negative word of mouth.
On which side of the 5th P do you belong?
False promises and unethical marketing leave bad tastes in the mouths of consumers. That is how consumer advocacy evolved to the prominent role it plays in the media today. Why bother making a promise to draw people through the doors if there is no authentic desire to keep the promise if it will be laced with disclaimers, loop holes and other hidden terms and conditions. Negative word of mouth from unsatisfied customers will leave you at a disadvantage against your competitors.
This type of marketing is often displayed in the car loan industry where companies promise the 100% guaranteed approval of a car finance loan. So what does guaranteed car finance really mean? According to carloan4u.co.uk, such claims cannot be supported ethically or legally. Not everyone shares the same credit score and ethical lenders should not approve all applications for borrowing due to the risk of default on the car loan. In Australia, the Australian Securities and Investment Commission cracked down on a company that was misleading consumers in its advertising when it stated that no application for car leasing and finance would be refused regardless of previous outcomes with other lenders. But the Commission stated that not only was it misleading because the company was not approving finance to all car loan applications as it had advertised but also because if the company had approved all applications, it would be in violation of Consumer Credit Protection laws in Australia.
With any type of advertising or marketing, customers must be able to trust what you are telling them so that they have the confidence to do business with you. If not, you risk undermining your brand and potentially losing business. While designing a product or business guarantee creates fear in the minds of business owners due to the possibility of being held accountable, the reality is that most businesses already practice an unwritten guarantee which is to satisfy your customers and make them happy. It is a fundamental and core practice of business but even though it’s not written, it should be as it will make the first step in instilling confidence in the minds of your prospective clients. Such a guarantee will help to differentiate yourself from competitors and the unique proposition can increase your sales. Additionally, as the majority of customers are non-confrontational, a small percentage will hold you to account on your guarantee. But it is important in crafting your promise that you make it specific and realistic.
According to Dwayne Gremler in the Journal of Service Research, a service guarantee is a tool designed to reduce the perception of risk among consumers while demonstrating quality and distinguishing your business from competitors. It also sets a standard for dealing with customer complaints and how to facilitate service recovery.
Design Your Own Promise
In developing your own service promise and guarantee, consider the following:
- Evaluate your competitors including their strengths and weaknesses
- Evaluate your own business or product’s strengths and weaknesses
- Design a promise that ultimately sets you apart and fills the gaps between your business and that of your competitors
- Determine what sort of compensation you will offer and ensure that it is comfortable, realistic and attainable. Don’t make a promise you will be afraid to keep.
- Before actively promoting the guarantee, test, evaluate and track your results. Determine if customers are feeling more confident with your guarantee and how that has impacted sales.
- If you manage to achieve a promise that you are comfortable with and you are satisfied with the initial results, design an advertising campaign to actively promote it in your market.
- Always be as specific as possible and make the guarantee completely authentic and transparent. The more information you give your customers, the more confident they will be as less risk will be perceived. Nobody likes a confrontation.
If you are successful in designing a promise that instills confidence in your customers, the experience of doing business with you will remain positive. That can only lead to your business flourishing by harnessing the power of positive word of mouth which will spread through social media and other channels. Businesses that are committed to honouring the 5th P and promise to be what they say they are will ultimately discover the best P of all: profit.