Remember the Four Ps? Well they’ve just been replaced, so you can feel free to forget them. All those marketing people who talk about millennials, the sharing economy, and living in a connected world have now adopted the Four Cs, and has taken the time to figure out what they are, and how we can use them in hotels.

The first C is **Co-Creation **– which solves the problem of inadvertently launching products that nobody actually wants.In the days of the Four Ps, you could decide on the product by doing a bit of market research, but nowadays that’s old hat. Today’s customers want to feel like they are part of what they are buying, and to achieve that feeling you need to engage the customers in the development stage. The Klaus K Design Hotel in Helsinki provides a basic example of co-creation in hospitality. Already famous for innovative design, they wanted to redevelop their lobby and bar to create an informal hangout space, so they invited guests to submit their proposals in whatever format they liked, before selecting the ideas they liked to complete the renovation.

It’s no longer about what a company thinks the customer experience should be – it’s all about what the customer thinks it should be, and the only way to find out is through interaction.

The second C is** Currency **– hotelsalready understand this concept, while the airlines have become the experts. The price of hotel rooms and flights should respond rapidly to changes in demand, or predictable peaks and troughs with major events or holidays. Once again, however, most hotels are not going far enough. Big data can give the hotelier more advanced tools than ever before, and as one provider, Duetto, explains it, you want to be charging as many incremental price points along the demand curve as you can – otherwise you’re leaving money on the table. As things stand, you can close off the discount channels when there’s a big event in town, but the downside is short term invisibility on those channels, which can be costly. Alternatively, you can raise your own best available rate on your own website which targets a certain proportion of your customers, but all the other channels will also be affected as the relationship between your various rates is often a fixed increment or percentage. The outcome is that changing prices for one target market means you might be mispriced for all the others. Duetto added the flexibility that is necessary in order to avoid this kind of problem.

One GM who has considerable experience with the open pricing concept is Richard Hatter of Hotel ICON in Hong Kong. “As new data become available and integrated into revenue management technology, marketers should explore strategically targeting guests with personalized pricing and customer experiences,” he explained. “Guest acquisition costs keep rising, so driving direct bookings and personalizing guest experiences is becoming a bigger priority.”  

The third C is** Communal Activation **– in which companies such as Uber and Airbnb are leading the way. Their business models have been successful because in the connected world they offered something other providers couldn’t. They give customers easy access to products and services which are owned not by them, but by other customers. In the sharing economy, the buying channel is peer to peer, so you buy from people you know or feel connected to rather than from big corporations.

The essence of communal activation is the quick and easy access to products and services, and that is typically best provided by peers. For example, Uber has now launched Uber Pool Express because Uber Pool just isn’t fast enough for some folks who need to get from A to B. Express Pool is a shared ride option that allows you to join other users with similar routes on the same trip and share the cost of the trip. That’s faster than Uber Pool where you have to wait for your shared ride to pick you up, because with the Express version you quickly walk to the spot where your ride is at.

Traditional marketing has involved trying to get noticed, but it’s much more effective to join the conversation than to start it. Birchbox is one company making a success from contributing to the female discussion of beauty products. Sign up with Birchbox and they’ll send product samples based on the kind of thing you’ve indicated you might like. Then you can try them, provide feedback for other members, and perhaps place an order for the ones you like.

The last of the Four Cs is** Conversation **– promotionused to be a one-way form of communication where you posted your promotion in a newsletter, hoping your customers would be walking in with the coupons. The result is you end up listening to coupon chasers and never really get to listen to your ‘real’ target market.

Thanks to technology, however, our promotions are now all over the internet, and that lets you have a conversation with customers which can have far more commercial value. You will learn what kind of promotions your customers react to most readily, and which ones aren’t really working, all from having direct conversations with the people who matter most. Platforms such as TripAdvisor make it easier than ever to engage with customers, and positive interactions can go a long way toward building the kind of relationships that keep customers coming back.

The Four Ps offered a great way to systematically organize a marketing strategy back in the days when life was simple, but in the digital age it will be the hotels which adopt the Four Cs as the basis for promoting their business which are the most likely to survive and succeed.

Recommended reading: Marketing 4.0 by Philip Kotler