Just How Premium Should Your Brand Be?
Tips on Achieving the Ideal Premium Status
Marketing a brand toward the ideal premium status can feel like aiming at a moving target. Few brands achieve success overnight, and even premium brands can struggle for years before reaching the sales velocity that allows for some financial and operational predictability. All brands want to sell to as many people as possible, but we all know that if a brand is premium and has a premium price, there’s a price floor that will make it inaccessible to many consumers. To figure out how premium your brand should be, consider these four factors as a guide to solving that complex marketing challenge.
Know what to be known for
It is imperative to clearly articulate what makes your brand a priority in the minds of your consumers. Perhaps it’s being the best-tasting salad dressing, the pioneer in lens technology, or the most unique in handmade pottery. That central idea must absolutely drive the marketing goals, strategies, and tactics that fuel everything you do. Don’t get hung up on whether or not being the best is measurable, but make the goals around being the best measurable instead. Stating what winning looks like for your brand will bring clarity to the team and help prioritize the best tactics to implement.
Understand your category’s tiers of premium
Having an objective, quantifiable assessment of the premium status of brands in your category clarifies what’s going on not only in sales, but also in the minds of your consumers. How wealthy are the consumers of each brand, and what’s their mindset toward knowingly choosing your brand vs. other brands? How much more or less are your consumers making trade-offs vs. the consumers of your competitors? Most categories contain three groups of premiumness, and we can see this in the numbers reflected in our Premium Brand Index. Being the most premium isn’t usually in and of itself a goal, unless, in your category, you want to be what Aston-Martin is to automobiles. Knowing the tiers—premium, mainstream, and value (high, medium, and low)—and which brands fall into those tiers can help direct creative messaging and predict the value sensitivity of your consumers.
Forecast opportunity with realism
Most brands don’t want to grow the category with their investments alone. We’d all prefer to start with stealing share. But how much capacity is there within your category for the premiumness of your brand, especially if your brand is new to the category? We have often seen that, even for premium brands, stealing share from private label can be lower-hanging fruit than stealing from branded competitors. The use of premium-focused data, especially when overlaid with IRI or Nielsen data, can identify the relationship between household penetration and units per household to forecast opportunity. Add some region-specific and retailer-specific data as different lenses, and the opportunities for gradual, incremental growth start to appear in the numbers. Knowing if your category has the financial capacity and unit capacity for X% incremental growth can keep a marketer from overspending relative to the reasonable growth possible within the next fiscal year.
Commit to the investment with discipline
Whether you’re spending on trade deals or spending on branding, the bottom line is: you’re spending. A thorough understanding of premium—means vs. mindset—can inform the frequency and depth of trade deals, coupons, and other costly marketing investments. How much marketing budget should be put to trade deals vs. how much should be spent on marketing activation? As marketers, we all know that it’s difficult to judge the long-term impact of consumer incentives. Are they attracting the price-sensitive consumers who won’t pay full price, or are they generating trial among those who will become brand loyalists? It’s hard to know, but knowing the qualitative means, mindset, premium status, and trade-off depths of every brand in your category sheds light on whether investing in trade deals is better than some good, old-fashioned branding.
The need for premium marketers is a disciplined approach. It is hard work. It involves weekly assessments of the data. It requires responding to and becoming aware of the Google Micro-Moments that can help you reach your consumers when they need you most. Plans are made, but when you deviate from the plan, it’s a conscious deviation. It’s not having unrealistic expectations of measuring ROI on every single tactic, but ROI on goals and initiatives. It also means making your investments on things that take time and attention, and being honest about what you can accomplish in-house vs. what needs to be done by agency specialists. The commitment is a disciplined one, and it requires both courage and financial commitment.
Have you made the commitment? Do you have the right perspective on premium?
Next topics in this series: Knowing Your Premium Brand’s Tradeoffs, and Balancing Innovation with Speed-To-Market