As the financial downturn continues, brands are under pressure.
I’m sure you’d agree the easiest strategy for securing a couple more customers is to reduce the price of your product or service. Needless to say, this strategy will damage your brand by weakening it in the eyes of consumers. As soon as the economy looks up, a discounted brand will be cast aside in favor of those perceived as market leaders. Your competitors will have earned customer loyalty and you’ll lose new customers you thought you’d harnessed.
As I write this column, Overstock.com‘s home page loudly proclaims its book prices are 25 percent below Amazon’s. It’s a good way for Overstock, a discounter, to raise customer awareness about a new product line. My bet is Amazon, which offers a broader range of titles and personalized site features to loyal customers, will never acquiesce to a price war with this competitor.
No matter how tempting it may seem to cut prices, don’t do it. Branding offers plenty of other survival strategies, based both on rational and emotional approaches. Here are a hints to help generate sales in hard times and to bond your brand more strongly to your customers.
- Offer more value for the same price. This technique isn’t perceived as price reduction, but as extra customer value. Pepsi might offer 25 percent more cola in its already gigantic bottles for the usual price. Interestingly (this is a fact), consumption increases. Consumer perception doesn’t ascribe a price reduction to the offer, which would precipitate a downgrading of the brand. Instead, people perceive the offer as a nice gesture on the part of the brand.
Offering greater value is a versatile strategy that can be adopted in a number of ways. Longer warranties and special updates on product improvements are variations of the strategy. Get creative about how you can increase brand value to customers without altering the price. Research shows that far from downgrading customers’ estimation of the brand, this technique increases incentive to purchase.
- Wrap your product in more than product features. Recently, I sat in the driver’s seat of a BMW. To my irritation, I had to turn my body 180 degrees to reach the seat belt. The feature seemed an inconsiderate rather than beneficial. But, as BMW explained, the reason for the body-turning stretch was safety. By obliging drivers to turn toward the seatbelt, the design ensures they notice what’s happening on the sidewalk, see approaching cyclists and pedestrians and can check for any impediment to the safe movement of the car into the driveway. Suddenly, a small feature is a valuable bit of brand information. It bolstered my opinion of the BMW brand and strengthened my loyalty to it.
Features of your brand you may have considered negligible can be used to give consumers another reason to choose it. I’m sure your product or service includes facilities and potential attractions not yet discovered or understood by your customers. But, as you can see from the BMW example, these can be extremely valuable loyalty-enhancers. You simply have to demonstrate and interpret them for your customers.
- Humanize your brand. Your interpretation of product features can become a story that makes a brand unique. The Diners Club story is one example. In 1949, a businessman, upon receiving the bill at a Manhattan restaurant, realizes he’s left his wallet in his other suit. His wife has to bail him out. To avoid this embarrassment in the future, he resolved to invent a means of paying cash without the need to carry money. So the world’s first charge card, Diners Club, was born.
Such stories can be used to strengthen ties between card customers and the brand. The story is memorable because it’s about people and because it reflects values we relate to.
The common denominator between the above three loyalty-generating techniques is avoiding price focus. Think rational; think emotional; increase perceived value and humanize your brand. You’ll generate sales and build strong bonds with consumers.
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