Why It’s Hard to Be PremiumSubscribe to Insights
We all know how hard it is to turn a profit in today’s economy. What’s even more difficult is sustaining the value of a premium brand, what with brand names shelling out coupons, cutting all marketing and even changing their product ingredients to become the “chipper chicken” of their category. (Thank you, Steve Martin.)
Although the “end” date of this downward spiral is a moving target, and one of great debate, if history is any teacher this is a cycle that will turn around. When it does, a generation of Americans who have been forced out of the market for all sorts of creature comforts, or forced to trade down from their preferred brand due to budget constraints, will be ready to spend again.
- Fish where the fish are today. — Sell where people can buy. Don’t sell where people can’t buy.
- Don’t ignore your legacy customers. — When things turn around, they will be the first to spend again. Do NOT make them feel like you only care about them for their money. Doesn’t work for most relationships, and this is no different.
- Don’t stop promoting. — You have competitors that have cut marketing budgets to preserve margins. This is especially true in public companies that are under intense pressure to hit earnings targets. Take advantage of that to build the perception of your brand as premium in the absence of competition for share of voice.
- Don’t sacrifice your brand quality. — Just because the competition is going down to the 10 oz. box, doesn’t mean you have to. Unless, of course, you REALLY have to. Continue to provide as high a quality product as you can for as long as possible. And when things pick up, you’ll have a reputation of premium quality even through the tough times to fall back on.
Take these principles, apply them, and see what a difference it makes to customer loyalty, brand perception and overall brand equity. Though right now, those valuable assets may seem useless to turn a profit, your brand will be the outlier in the category. These moments of heat are the ones that define your brand’s legacy. Be the bold brand. Be the rebel. Be the premium brand that thrives in tough times, instead of struggling to merely survive.Subscribe to Insights