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Payments: The 5th P Of Marketing?

A Snarketing post by Ron Shevlin, Director of Research at Cornerstone Advisors

Marketers, and perhaps those of you who took Marketing 101 back in college, might remember the 4 Ps of marketing — product, place, price, and promotion. The concept (which I think was originated by a Northwestern marketing professor) describes four “levers” that marketers work with, adjust, or alter, in order to influence marketing results.

In the past few years, there have been numerous articles proclaiming the death of the 4 Ps. All of these assertions, however, have failed to disprove that product, place, price and promotion are no longer relevant. For sure, service and service-related factors like information regarding product usage has become important, but these factors simply expand our definition of product. Place used to mean the store, but again, with the advent of the Web, and now mobile, channels, the definition of place is simply expanded.


In addition, there have been numerous attempts (usually from bloggers and social media gurus) to add a 5th P to the mix. I’ve seen articles claiming that people, personality, personalization, and productivity are all the new 5th P. One article said that the new 5th P of marketing was Peter (can you guess the name of the author?).

None of these articles deserve a link here because they’re either an element of the existing 4Ps (e.g., packaging and personalization are really about the product) or they’re simply not a lever (personality? really?) that can be managed by marketers to influence marketing results.


I’ve been debating (with myself) whether or not Payments (or more exactly, influencing consumers’ use of payment methods) rises to the level of a 5th P.

On one hand, payments could be seen as simply an element of price. Incentivizing (not a real word, but go with me on this one) a customer to pay cash instead of credit because it’s beneficial to the marketer could just be price manipulation.

But there’s growing evidence that the choice of payment methods available for a particular product can influence a customer’s choice of product — regardless of the price.  And this would qualify Payments as a lever — or 5h P — that marketers can manage.


This is old news for the auto industry. Auto manufacturers have made Payments (e.g., leasing vs. financing) a part of the marketing mix for a while now. In this case, I would argue that Payment is not an element of price. In fact, I’d bet most car buyers don’t even realize exactly what price they’re really paying when they accept a lease or financing offer for $250 per month for 24 or 48 months.


For other industries, however, the choice of payment methods is just beginning to influence choice of providers. Having processed some 42 million (and counting) mobile payment transactions between Jan 2011 and Q2 2012, there’s a strong case to be made that Starbucks has engendered customer loyalty through its mobile payment capabilities.  Offering prepaid debit cards has also helped to keep Starbucks’ customers loyal to the company.

Both of these capabilities — mobile payments and prepaid cards — are examples of how Payments have influenced marketing results without changing the product, price, place, or promotion mix.


The original concept behind the 4Ps was that the elements were part of a marketing mix — and that marketers had to allocate resources between the elements of the mix to influence marketing results.

Payments meets this criteria, especially in a retail context. In an article title in Retail Info Systems News, a comment on the site makes a great point:

“Though the benefits of having a mobile POS is surely directed towards improving customer service, it also frees up store space occupied by cash registers, typically in the range of 30-40 % of the total numbers on weekdays. This space can be effectively used to display/sell merchandise.”


Bottom line: When the 4Ps of marketing were conceived in the early 1960s, the choice of payment methods boiled down to cash, check, and credit card (and I’m not even sure how many people had a credit card back then).

But today, there are more payment methods available, and the list is growing. And because of the importance of technology to many people (e.g., there is a segment of people who like to be seen as early technology adopters), the choice of payment methods available for a growing number of products makes Payment a legitimate element in the marketing mix. In other words, there’s a new 5th P to marketing.

Ron ShevlinRon Shevlin is Director of Research at Cornerstone Advisors. Get a copy of his best-selling book, Smarter Bank: Why Money Management is More Important Than Money Movement. And don't forget to follow him on Twitter at @rshevlin.

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Digital Banking Report | 2017 Marketing Trends


  1. Jodi Torres says:

    I really enjoyed this post Ron. Payments are so vitally important to financial institutions, especially credit unions. I am watching and reading with great interest information on the evolving payment landscape. There are so many new technologies and companies entering the payments arena that are both a big threat as well as an opportunity for FIs. I had not really thought about it in the context of marketing until this post. Thanks for broadening my view on this important topic.

  2. Payment types might be viewed as a matter of convenience. Certainly the early aspects of Diners Club understood that concept. Businesses could select a place based upon the convenience of using the Diner Club Card to entertain at the restaurant. As acceptance of plastic payments became more universal the concept of place associated with payment type no longer had to be considered. However, the use of mobile payment types is once again resurfacing the issue. A quick look at Starbucks and the concept of convenience in relation to mobile payments is thrusting into the market place. Walking into a Starbucks and getting the product by just saying my name and having my phone adds to the product’s placement.

  3. Certainly the world would not go round without Payments so I agree it could be a good contender for the 5th P. I would offer as an alternative — People…to represent the importance of relationships and customer experience/user experience in the product design process for products in our ever-increasing digital world. People even hints at Personalization, referenced in the article, which I think is too narrow to stand on its own.

  4. Thanks for another thought provoking PPPPPost.
    Payments gets a lot of industry attention but not nearly enough tactical attention – the breadth of payment options offered by an individual seller, the promotion of those payment options, and the prioritization of those options (company’s priority or the consumer’s) among other considerations. I suppose that actually sounds somewhat strategic (and it is) but I am talking about the specific presentation of this information in physical locations, websites and particularly on invoices. A significant portion of my business is designing and automating high-volume invoices for phone, health, insurance and other major companies. While these companies would like to push consumers to online billing, many consumers still want to receive a paper invoice – but many prefer to pay that bill on line. Companies benefit from eliminating physical processing in at least one direction, so facilitating as many ways of “non-paper” (forgive me printers) processing is in their economic interest. Sadly, when companies spend the time to encourage this behavior, they do it with lame (and potentially misleading) messages like “Save a Tree with online billing.” Perhaps if Banks encourage their “lock box” customers to embrace a broad array of payment options and provide tools to make it easy (without dealing with 17 vendors) the 5th P will get the attention it deserves.

  5. Just saw another cool example of “the 5th P:” The Dodge Dart Registry allowing newlyweds (or anyone) to crowdsource the funding of their new car.
    I’d love to get your take on this.

  6. Wow, I think that’s a great example of 5th P. Not sure I would have used the term “crowdsource” but applying the registry concept to car buying really is an example of using payments to influence choice of product(s). I do think I agree with the Heiselman comment that the registry concept isn’t a good fit with the brand, but that doesn’t negate this as an example of 5th P.

  7. Ron,

    The payment process rarely gets the attention it deserves. We found in the B2B space that the top problem area was around payments and invoicing ( Whether or not payment deserves to be the 5th P, it certainly presents a big opportunity for businesses to differentiate their customer experience by creating a payment process that isn’t awful.

    Great post.


  8. Ron,

    It sounds like you’re trying to talk yourself into payments being the 5th element. Let me pull you off the ledge and confirm that it is not. Payment is, indeed, just an extension of product – another delivery channel thereof. Cash, Checks, Credit, Debit, Pre-paid, ATM, Online, In-Branch, Mobile, P2P and NFC (go Bears!) – the list continues to grow with technology, but all are delivery channels of the same thing; the Product.

    Marketers have, in-theory, full control of adding to or enhancing these channels, thus enhancing the product and allowing for more diverse promotion.

    Nice post (great Dart PROMOTION)


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