Brands send powerful messages through how they price. Price can be influential in portraying a brand as affordable and ‘on the side of the customer’, or exclusive and just for the few. It can generate responses ranging from the thrill of a bargain to the indignation of a price tag that seems far too steep.
As Martin Bishop explained here, the pricing mechanisms that generate those emotions are increasingly varied, ranging from the ‘lock-them-in’ attraction of unbundled fares for those lured by what it says on the tag to the dynamic pricing of hotels and Uber that re-sets worth based on current demand.
Economists tend to view pricing as an expression of supply and demand, with scarcity increasing price and over-supply pushing prices down. While those dynamics are true for commodities, they don’t always apply to brands. And that’s because brands look beyond market logistics for proof of value. They draw on powerful attributes like perception, aesthetic and story to move the brand’s price beyond what the market would otherwise ask. In fact, through its choice of pricing, a brand sends three important signals to its target markets.
1. Access – price makes a product or service rare or plentiful, regardless of the actual production cost. That, in turn, decides who even looks and who doesn’t.
In keeping with its luxury technology status, Apple prices its products high. In so doing, it not only confines its buyers to those who are passionate about the brand, it also reinforces that Apple products are not for everyone. Walmart does the opposite. By dropping its prices to the point where it now matches online retailers, the brand reinforces the value of buying physically, directly addressing the showrooming issues that plague retailers elsewhere. The clear intention is to lift foot traffic. In this context, price lays out the welcome mat.
This piece from Neil Glassman draws a distinction that I think has escaped many of us between conversation and recommendation. As the author himself says, he thought of social media as a platform to directly scale up word of mouth (WOM) marketing. But the synergy that looks so obvious doesn’t happen. In fact, says Glassman, compared to the effectiveness of what takes place offline, surprisingly little WOM is generated on social media.
My sense is that while there is plenty of talk being pushed into the media, that content is then not, for the most part, being transmitted-on (or more specifically picked up) in the way that it is when WOM is in full flight.
Glassman himself hints at why. People, he says, participate in social media to interact with friends and like-minded strangers about things that interest them. Social media marketers, on the other hand, engage with their customers hoping to encourage them to spread the word. The first interaction pivots on “us” – about the things that “we” share, which means ownership exists. The second is about turning “mine” into “yours”. It’s about encouraging people to take ownership.
Glassman continues, “It appears that as much as social media has changed our networked world, it hosts only a small bit of the conversations about brands, products and companies. Not what social media marketers talking amongst themselves would expect.”
It’s tempting to believe that every brand must be vastly different and that every opportunity to push the boundaries should be taken if the brand is to win. But is there a case for normality that we’re missing here? Should, as Jay Bauer has suggested, brands stop trying to be amazing and just get on with being useful?
There’s a certain power in being mundane – in the sense that an everyday brand is exactly that. It has habit and predictability built into its very being. And as Riley Gibson points out, there’s a proof factor in that regularity that so many brands overlook in their bid to find the next big bang. He cites two great examples. The first, based on work that Professor Laura Kornish has done on consumer interactions, shows that “Sometimes it’s far more valuable to find patterns in what people are requesting than to find that one, big *I never thought of that* idea.” The second, based on studying how teens see their TV and internet usage, showed that “Sometimes, products are far ahead of their time because they assume a level of comfort that isn’t yet there in the consumer. That’s where the insights of the collective can be used to help us question everything.”
In both cases, the brands in question risked missing the small opportunities in their bid to find the great leap forward. What regularity offers is enough recurring events to form patterns and discover a moment for inflection that consumers may recognize but not necessarily know how to get past.
The learning here: that brands looking to improve their offering should first look to improve how and when the product is used and how else and where else it could be used. Easily. Quick win changes that may seem mundane, even unnecessary, to your brand’s technical and product people can add up to important improvements for consumers.
A recent conversation with a client looking for an ad agency was a reminder of just how little of its own dog food the industry eats. Her assertion that “they all look the same and say the same things” highlighted just how difficult brand differentiation is. It’s so hard in fact that even those who claim to do it for a living struggle to do it for themselves.
Marketers come to ad agencies for what they hope will be clear brand strategy, distinctive brand positioning and brilliant storytelling. Ad agencies should be the living proof of what is possible, and the work they do to position their own agencies should be the exemplars – and yet many seem, on review, to display an underwhelming ability to position their own agency brands in ways that make the choices clear and valuable for clients.
It’s not about the work – Visit umpteen traditional and digital agency websites and the first thing you’ll see is a plethora of projects, with Cannes winnings and other awards displayed proudly. The work is the product for agencies. Get that. The awards are the certificates of excellence. Get that too. But when everyone claims to do great work, when everyone wins awards (one year or another) and/or when you can’t see the relevance of any of the work to what you need, it fails as a differentiating factor.
It’s not about the people – Advertising, like all professional services, is a knowledge sector. It’s powered by people, and a great number of those people are very, very good at what they do. So having great people, or even a large number of people, is unlikely to transform your agency into the go-to – because there are thousands of great teams globally. Industry insiders get very excited about who is where and what they’ve done. To everyone else, it’s a hygiene factor. Again, marketers expect top flight agencies to have top flight people. It’s important for marketers to know who they are going to work with, obviously – but is it a compelling reason to prefer? Probably not unless they know the industry from the inside very well indeed. (They also know that the chances of them ever working directly with the creative ‘stars’ are close to zero unless they have a very, very large account.)
It’s not about the process – The methodology is the methodology. It’s how the agency gets you to the end point. It should be robust and measurable. But is it a point of difference? Absolutely not. Because, again, most agencies have robust and proven methodologies. It’s not a secret sauce anymore. It’s expected.
Recently Budweiser has been taking flak for its continuing aggressive stance against craft beers. Social media reaction at least seems to be that this is an unfair fight and that the big corporate should not be competing in this way. I’m a long-time advocate of challenger brand strategy. I’m of the view that if you can goad the incumbent into a fight and portray your brand as the much smaller player with principles, then it’s game-on. But what if you’re on the other side of the counter? If you’re a major brand and you’re being hounded by an upstart smaller player, how can you respond without drawing flak or encouraging buyers to support the underdog-that-dared?
Start by recognizing the strengths that you have to play with: an established place in the market; the reach that comes with your networks; the reserves to play the long game; and the resources to at least match, and at best overpower, anything that others may throw at you. Chances are you also have history (and therefore track record) on your side and hopefully that history proves your commitment, experience and expertise. Those are a lot of attributes to work with. The key is to use them carefully.
If you don’t want to take a direct approach in response to what you are being challenged on because you are concerned, probably quite rightly, that it will play straight into the hands of those throwing stones, here are four oblique but highly effective ways to minimize the effectiveness of the insurgent.
1. Counter-offer rather than counter-attack – In the short term, go to market with a great offer that simply makes choosing you so much more attractive. In the longer term, take the opportunity to discreetly re-shape your positioning so that you are less vulnerable to the position that the challenger is taking. Be careful in both cases not to make what you are doing appear as a response to what the challenger is claiming or a competitive strike.
2. Congratulate your customers – Mount a charm offensive. Be humble and grateful. Acknowledge. Remind the market just how popular you are as the leader and what that means in terms of what you deliver every day. Position this as a key benefit for your customers that the challenger brand will simply be unable to match. This approach is an excellent way to first recognize and then galvanize those who continue to be loyal to you. It’s also a quiet but effective way of using the pressures of scale and footprint to remind your distributors of why they should continue to prioritize you and not chase the sector’s latest bright shiny object.