Do you have the courage to STAY a premium brand?

by Tony  Fannin, president, BE Branded

If you’re not a premium brand, then this may not be for you. But, if you consider your company or any product/service line you offer a premium line, this may interest you. As a premium brand, it’s tempting to cut your pricing or give too much in today’s economic conditions just to make the numbers (and most of the time, your margins will be too thin to sustain the brand). It takes greater courage to stay true to your brand. It’s those who remain consistent that are rewarded in the long run. Now, I’m not saying not to be creative with incentives or short-term promotions, but they must be in alignment with your brand. If you do too much, you run the high risk of devaluing your brand and you’ll spend even more money later just to recapture your lost margins. Here are a few points about being a premium brand in challenging economic times:

• Discounting doesn’t buy loyalty. Premium brands don’t discount because discounting doesn’t buy loyalty. It may get you a short-term rise, but in the end, it will erode your brand equity. You’ll spend many times over just to regain the lost margins you have so easily given up. You begin to reinforce the image that your brand no longer carries a high value and that it’s perceived worth is less than it was before. When people shop price, there is no loyalty. As soon as they find a cheaper price, they leave you.

• You could lose your core. By downgrading your brand through pricing or unrelated promotions, your core customers, who are willing to pay for the intrinsic value you deliver, will begin to shop else where. They will begin to feel like you’ve been overcharging them all along. Once your core believes that you’ve “sold out”, they will see your brand as something less than desirable and thus will not be willing to pay the premium any longer.

• Reward your best customers. During economic downturns is the time to reward your best customers. Give them specials that no one else can get. Reward them for their loyalty by being creative in what you offer them, like first access to new items or limited editions only for loyal customers. Find new ways to engage and reward your best customers. This will endear your brand in both the downturns as well as the good times.

• Emphasize your core purpose. This reminds your customers, your employees, and your executives of why you’re in business in the first place. This is beyond making money. It relates back to what you stand for, not what you sell. (see: Do you really know what your company sells) By reminding customers of your core purpose, you reinforce why doing business with your company is deeper than just a financial transaction. It’s a way to make a difference.

• You’re set up for the future. Once the economy begins to recover, you’re already miles ahead of the competitors who slashed and burned. You’ve created a deeper relationship with your core customers and they will be your catalyst when the recovery kicks in. Instead of trying to make up for lost ground because you devalued the brand, you’re already top of mind and have cultivated a deeper loyalty with your core customers. Your marketing investment can concentrate on accomplishing growth goals instead of spending dollars just trying to get back what you’ve lost.

I’m not saying that preserving a premium brand is easy. It’s not. But, if done right, the investment payback can be multiple times over what you would have gained with a short-sighted price war. It’s often said, if it was easy, everyone would be doing it. And if everyone is doing it, what value does it really have?

www.bebranded.net
317-797-7226

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About Be Branded

Tony Fannin is of President of BE Branded, an integrated marketing firm who helps clients BE Somebody to their customers. If you aren't somebody, then you are commodity.

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