Believe it or not, people are willing to pay for premium. But there’s no magic tricks or hypnotism involved to prise cash out of hands – it’s just down to basic marketing techniques. Snazzy logos, brand values and piggybacking are examples of how businesses crawl up the premium ladder, but there are simpler ways.
It may sound obvious, but a high price equals a premium product. The price tag is a quick way for customers to judge the quality without too much research. Before Starbucks swooped into the world of coffee, a cuppa joe would cost a quarter of their going price. How do Starbucks get away with it? Although their coffee is far from revolutionary, the higher price tag makes it appear a cut above the rest. Consumers love the brand, it’s globally recognisable and people are happy to pay more for the Starbucks experience. Each coffee shop’s interior is slick and the fancy Italian terms ‘grande’ and ‘venti’ attract the more culturally aware coffee lover. In the same way, Grey Goose vodka charge 60% more than the household brand Smirnoff for essentially a colourless, tasteless alcohol. Other than the arty logo, what differentiates Grey Goose from the others? Through an almost placebo effect, consumers seem to prefer the taste of a product if they’ve spent more; they feel obliged to enjoy something if they’ve winced whilst paying for it.
Let’s be honest; people do judge books by their covers, and it’s the same with brands. A good logo is key, but through relentless repetition a brand should also be recognised for its colour palette, shape or even its concept. Some examples? Chanel, Veuve Clicquot, Mercedes… We know you’re picturing them right now.
Another strategy is to build the perception of a brand’s superiority to justify the high prices. Through product development and new technology, brands can beat competitors by demonstrating how they can provide something a little better. For cleaning products, this may mean developing a ‘three-in-one’ solution or a product scientifically proven to last longer than cheaper alternatives. Premium also means tapping into your audience and knowing what the word means to them. Nowadays, consumers are willing to pay more for organic produce or a brand that shouts about their eco-friendly credentials, or a business that supports a charity or the local economy. For some customers, aligning values is a unique type of luxury.
Too much choice can be overwhelming, so these days simplicity can also mean luxury. New research revealed 62% of consumers will pay more for a simple experience. Supermarket brand Aldi offers a simple shopping experience without presenting complicated promotions. This means customers don’t have to dilly dally by choosing between seven different types of butter. The idea is that customers can finish their weekly shop in under 30 minutes. Time is a luxury and Aldi understands this – they have empathy for the customer and they want to make life easier.
Brand partnerships are also a fantastic way to reinforce a premium label. When Singapore Airlines commissioned BMW to redesign their cabins they immediately became associated with the staple luxury brand. This way, Singapore Airlines capitalised on their partner’s already solid reputation.
Unlike mass brands, premium brands are more interested in honing in on a specific group through focused marketing. This reinforces the idea that the customer belongs to an elite group and the brand becomes a status symbol. A good example of this Ferrari who rarely take out huge advertising campaigns, but they sponsor the Grand Prix instead, targeting a select few.
All in all, through marketing initiatives, a premium brand should constantly remind the consumer of their original promise when they signed up in the first place, whether that’s ease, quality, prestige or a memorable experience.