Tag Archives: Brand Integrity

Does Brand Value Live Beyond the Grave?

enduring-value-brands-Lehman-BrothersI was most amused when reading about a new Scotch whisky that now carries the Lehman Brothers name. The product is called “Ashes of Disaster,” so is clearly meant to evoke memories of the failed financial services company. As a reminder, some consider the failing of Lehman Brothers the catalyst that triggered the 2008 global financial meltdown.

According James Green, a 34-year-old London entrepreneur that is launching the whisky, “It has a contrite, bereft peatiness,” as quoted from the Wall Street Journal article. Mr. Green plans to offer his spirits online and has gotten orders from bars in London and New York.

Who Owns a Brand Name Once a Company is Gone?

My curiosity was focused on a few aspects of this story. To start, there is the legal ownership question of the name. Barclays PLC bought parts of the firm in bankruptcy – and as you might have guessed, in 2014 tried to block Mr. Green’s using the name. According to the article, Barclays PLC said in the U.S. trademark filings that it “has a bona fide intention to use” the name for financial services. But, that wasn’t enough to stop Mr. Green’s endeavor.

I have a very basic understanding of trademarks. From what I know, even if Barclays PLC did open a new investment bank called “Lehman Brothers,” it still would not necessary preclude other businesses from using the name if the likelihood of confusion was minimal. In other words, if you ask for a Lehman Brothers whisky, most would not be confused to think you wanted to open up an IRA account at an investment bank instead.

Mr. Green has elected to use a name that invokes the reminder and feelings that we all felt (and experienced) at the time this financial firm failed. This is an important part of his awareness and branding strategy. In fact, unintentionally, I too am helping with his plight by writing this blog post (as are other journalists writing about this story).

I am not a lawyer, nor have I read the trademark filings, nor do I have visibility into exactly what Barclays PLC purchased. It could be the case that the assets they purchased did NOT include the brand’s name. If this were the case, then hats off to Mr. Green for having the insights and “chutzpa” to proceed forward.

Not the First Time

In credit to Barclays PLC, this is not the first time a company purchase has failed to include the appropriate trademarked or product names. Back in 1998, Volkswagen acquired Bentley Motors Limited, which at the time included both the Bentley and Rolls Royce motor car divisions (source).

What wasn’t recognized at the time, however, was that the name “Rolls Royce” was owned by the aircraft division, something that was not part of the deal. As you can imagine, this created an enormous problem, headache and embarrassment for VW. Fortunately, significant supply chain partners and future business opportunities were presented to help smooth the way. Their problem was ultimately resolved at a significant cost and with great complexity. Here is a detailed article for those who would like to read the whole story.

The Enormous Value of a Brand Name

What I find most interesting about the Lehman Brothers whiskey story is the fact that the two businesses are completely different – yet Mr. Green considers this name to be an important part of his go-to-market strategy. If this indeed the case (time will tell if he has success), then I would propose we need to completely re-think trademark law on company brand names. The value clearly extends for a wider scope of influence and, in this case, beyond the grave of when a high profile company went bankrupt.

In a similar note, the old adage of “any publicity is good publicity” might need to be updated or expanded upon. Perhaps any brand recognition is good too? Despite the fact that many, many people lost their jobs, their life savings and more when the original Lehman Brothers was dissolved, an entrepreneur looks to start a new business with the exact same name. If such a name tied to a terrible event can somehow be deemed worthy of launching a new product line, then I have a hard time figuring out if there can be any bad impact from a brand name, once it has become recognized on a global scale.

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Social Media’s Influential Role

role_of_influencer_todayI have already written about the important role “influencers” play in the purchase process – from the choice of what ice cream flavor to eat, to the complex purchase cycle of an enterprise software solution (link to prior post). This article will take a closer look at how social media has taken on an important role in helping influencers connect with buyers along their purchase journey.

It wasn’t long ago when Facebook was an application just used by college students looking to make plans for the weekend, or to catch up with others on recent news or activities. The amazing growth of members quickly validated how popular and how much value its members place with this social community.

Then, something interesting happened. Companies began creating pages, and the race to add “Friends” began.

I remember considerable apprehension and discussions that occurred in marketing departments about how much time, effort and resources should be applied to this social network, among others. Soon, success stories began to emerge from those businesses selling to consumers (B2C). Then it became clear that these online communities were actually impacting sales and the brand’s perception in the marketplace. Prospective customers were going to social media sites to share product stories, endorse or share an exceptional experience or rant about poor customer service.

Recommendations and referrals became important and seen as endorsements or validations to try new products or see a new movie, as just two examples. The role of influencer has gone digital.

Early adopters began to see patterns. Offer a venue for your customers to speak about their experiences with your product, and other future customers would take note. Add advance notification of a future sale to your followers, and response rates improved. Of course, this connection is most compelling if your own friends are the ones doing the recommendation … but this level of familiarity with referrals is not necessary.

Influencer Segmentation in the Digital World

Today, with the passing of time and the knowledge that has been gained, it is apparent that not all social media sites are the same. For example, Facebook might be a great venue for consumer goods products, those that are not too expensive, and could easily be substituted based on incremental differences or brand perceptions. Yelp, on the other hand, seems to have found a niche in the sharing of service stories, such as eating out at a restaurant or using a hair salon. Travel Advisor, on the other hand, has now become the place to research vacation stays, tourist attractions or other such activities you might do when travelling out of town.

Other social media communities, such as LinkedIn, have proven to be quite effective for presenting thought leadership discussions. This type of discussion indirectly helps shape the perception of your brand. Influencers will take note, and either help or hurt your ability to promote future business opportunities.

Each of these venues has now taken on a critical role – letting influencers expand their reach to be virtually global. This is an enormous responsibility, and one that must not be taken lightly. I now feel almost an obligation now when I take a trip, to be sure to provide my feedback on what worked well, and perhaps what I would suggest to improve, so others can gain from my experience. If we all took this approach, I suspect global service levels would all go up.

Nowhere to Hide in the Digital World

vw_diesel_scandalOf course, we don’t live in such a perfect world. Anytime there is an opportunity for companies to take a shortcut to save time or a few dollars, some will take this less than ethical path. This was recently the case with the VW Diesel Scandal, where a faction within VW thought they could cheat their way to passing U.S. emissions tests with engine-management software that altered emissions during the test cycle.

The proverbial “ball” is now in the court of the digital (and other) influencers. How will this end? How much brand erosion will occur? How much will people forget over time?

As a point of reference, it was just a couple of decades ago when the Audi 5000 had sudden acceleration problems – at least that is what the story was on CBS’s 60 Minutes back in 1986. Interestingly, three years later, the National Highway Traffic Safety Administration (NHTSA) issued their report on Audi’s sudden unintended acceleration problem. NHTA’s findings fully exonerated Audi. Regardless, Audi sales collapsed from 74k units in 1984 to 12k by 1991. Anyone who experienced this crisis first hand knows that their car became virtually worthless over night – no one wanted to buy a car that could allegedly accelerate suddenly, and potentially run over someone! It took nearly 10 years before Audi was able to make significant inroads back in the US market. The company has always claimed their innocence.

That incident occurred in the 1990s, when digital influencers didn’t really exist, with a company that claimed innocence. Today’s VW incident is totally different, in a very different time. Will VWs fate be more severe? Can they recover? Or, have we all become almost “numb” the fact that some companies will take advantage of its customers if given the chance?

One thing is for certain. If we as digital influencers decide “enough is enough,” we can certainly get our message out there and heard by all – and cause havoc to the brand that cheats or deceives us. And that is a force to be reckoned with. Markets and senior management teams take note – we are all brand stewards and need to take very seriously the role digital influencers play, as part of the obligation in taking ownership in the brands we work for.

 

Gordon Benzie is a marketing communications professional and business plan adviser that specializes in creating and executing marketing communications strategies. Gordon can be found on Google+

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Giving (and Gaining) Value from a Social Network

The_value_of_a_social_networkRecently I wrote about the concept of identifying “personas” or profiles of your prospective customers, as part of your social media marketing program. Once you have completed this task, considerable value can be obtained by leveraging social media to identify where these Personas “live” or spend their free time. The ultimate goal is to build a relationship from a foundation of trust to gain valuable insights as to how your product or service offers the greatest value to the right audience. Further, if done correctly, this exercise can yield insights as to what future direction you should be taking your product roadmap, or what future markets might be most lucrative to pursue.

The first step is to identify a couple of personas and then figure out what social networks these individuals frequent. Here is where a little market research is needed, as well as a few Google searches. Think like your prospect who wants to learn more about how to buy, use or retire your product – given the wealth of information now readily available on the Internet, this shouldn’t take too much time. Once identified, your next step is alignment – becoming a trusted advisor, an educator or a visionary that offers insights to this group of people that they will value and listen to.

One example of how to accomplish this goal is to reach out to community organizers or owners to see if there is some future event you can sponsor or host. You could even reach out to the community to introduce yourself as a brand ambassador, with the intent of learning how to better improve your product. You could volunteer to offer free trials for new products, or paid focus group opportunities. Public relations can play a role here.

This strategy can help draw out early adopters and others that have a passion for your service or product, which in the end, is the perfect person for you to speak with and draw feedback from. If you gather market intelligence deemed worthwhile and execute upon it, this person will likely become a future advocate.

It is as simple and as complicated as that. I say “simple,” in that if you do these steps and your future product vision is in alignment with the feedback, you have a “win-win.” Things get a bit more complicated if a gap exists between your product direction and the feedback you obtain. At that point, you have to ask yourself, what is the right direction? Either you are going down the wrong path or you are speaking with the wrong prospective customer. After all, if you aren’t designing your products and services for end users to gain value, what is the point?

 

Gordon Benzie is a marketing communications professional and business plan adviser that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+

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In Pursuit of a Social Media Persona

social-media-marketingIn a prior post I made a few observations on the incredible proliferation of social media, and what a great thing this social transformation has been for marketers. Never before has it been so easy to reach out to a group of prospective customers (or clients, which are different according to Mr. Godin’s recent post) that all share a common attribute, interest or buying behavior. This exercise is a given for anyone writing a business plan or hiring a business plan writer today.

The next question is “what do I do next?” How do I take advantage of this built in community?

The first step is to identify a couple of top profiles or “personas” you are most interested in getting to know. Your objective is to identify what type of person is most likely to gain the greatest value from your product or service, and hence could become a future brand advocate. Ideally, this person will become so passionate about your offering that they become an influential reference to secure new business not only for themselves, but for others in their community – your target audience.

It might be helpful to consider where some of your best customers or clients came from in the past. Were these people that bought your service or product for themselves, or were they buying on behalf of someone else or the company they worked for? Was there a life event that triggered the purchase? Or, was their purchase tied to an entertainment choice? In all likelihood, you will identify several of these personas that make up 80 percent of your buyers, based on the 80/20 rule.

Once you have identified the first profile, the next step is to figure out where this persona “hangs out” in social networks. If they don’t, then social media may not be of much value for you. Assuming they do, your next task to join that community. Here is where a line must be drawn – don’t try to fool others that you are a potential buyer – full disclosure is necessary to build trust into your relationship. Deception might get you one sale, but it won’t build you a following.

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Why do Public Relations?

Why do public relations?By Gordon Benzie

 

For this post, I thought I would challenge what the role of public relations is, with the objective to provide a thoughtful perspective on what value PR plays within an organization.

To start, the objective of public relations or PR is to raise awareness of a company, non-profit group or any other organization. Why does this matter? Well, to start, it is a lot easier to sell products or services if your audience has heard of you. Simply stated, no one wants to buy from a stranger. Public relations overcomes this sales hurdle by creating stories about the organization that will be viewed as interesting, or at least interesting enough to be read about by your target audience.

Note that this methodology must be applied with the sole objective to engage your audience. If other people find out, that is fine. But, you must be careful to not waste limited resources reaching individuals that will never be part of your buyer’s purchase lifecycle. This philosophy must be applied religiously to every opportunity for contributed articles, guest blog posts, speaking engagements and award opportunities.

My Audience Already Knows Me

I have spoken to some business owners who state that their target audience already knows who they are, and they know all about their company’s product or service. If this is the case, why spend the investment to reach out to them again? The reason why this investment makes sense is that it is going to help you to continue to best serving your market segment. Just because a customer has heard of you doesn’t mean they will continue to purchase or renew their existing services with you on a consistent, never-ending basis.

The Risk of Complacency

Imagine this scenario as a theoretical a case study. A new competitor enters your market. What do you think will be the first thing they do to introduce themselves to your customers? Odds are some sort of PR campaign, including announcements, special offers, grand opening day parties, etc. They must make this investment as they are coming into your market as a “disruptor,” which must be announced in order to be effective.

Now let’s say that you haven’t been investing your own PR campaign. Maybe funds have been tight as you have neglected this activity for the past year or so. Maybe your website and social media channels are a bit out of date too, falling into the category of something that could be deferred for a year or two.

Unfortunately, you are now a sitting duck for this new competitor to come in and eat your lunch. Once they begin making noise, you will be caught off guard. Assuming you move quickly and start to invest in getting your PR program back on track, it will still take time. Days, weeks or even months will pass before you are able to first get your routine changed to re-focus on this topic. You will be in “catchup” mode for some time. Every month you are behind is a month where you are at risk of losing customers. Think about it … what is the opportunity cost that someone might come into your market and try to steal market share?

At minimum, it might make sense to at least keep a few programs running, even if funds are tight. This way you still have a “toe” in the water, as a steady “beating of the drum,” to remind the market and your audience of current customers and prospects. This activity states that you are still there, and are actively reaching out to them to continue to help better address their needs with your product or services. Seems like a good investment and an even better business strategy decision that can be easily incorporated into your marketing communications strategy.

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+

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Did Labor Unions Really Kill the Twinkie?

The nostalgia world may never be the same after the events from earlier this month. After 88 years, Hostess, the makers of Twinkies, Ding Dongs and Wonder Bread, is going out of business. According to the story that ran on NBC.com, the CEO blames the unions, which made the decision to go on strike as part of the latest round of labor negotiations. The company has been in Chapter 11 bankruptcy proceedings for the past 10 months or so. Last week it was announced that all assets will be liquidated, resulting in about 18,000 employees losing their jobs – certainly an unfortunate turn of events.

When I first read this news story, it struck me as interesting how strong the focus was about the role that the Labor unions played in “bringing down” the company. Since the labor unions would not accept new lower salaries, the only choice CEO Gregory Rayburn had was to shut down the company.

That is one way to tell the story.

Another angle is that the company failed to adjust to the times. Over the past decade or so, eating habits changed – the focus today is on eating healthier foods. Given this trend, it is not surprising that a company such as Hostess began having problems, given its product line. I don’t think anyone will argue that the nutritional value of a Twinkie is not too high … according to info published on Livestrong.com. At 150 calories per Twinkie, it has 4.5 g of fat, 20 mg of calcium, 20 mg of cholesterol and 19 g of sugar, equivalent to almost 5 tsp. Double each of these figures for the typical way this product is sold, as a two pack. Other Hostess products don’t fare much better.

This brings me to my point. When you are crafting a story for the press to cover as a business communications or news announcement, there are many options on how to pitch it. Seldom is there just one story. In this case, perhaps the Hostess CEO and management team sought to blame the unions for the downfall of their iconic institution in order to deflect a different line of questioning – such as what were you doing about new product introductions a decade ago when this trend first became obvious? A few days later, more details began to emerge indicating that maybe there were other issues impacting sales. Clearly their cost structure was not well aligned to revenue. It might be that there is no business model that could work for these products today; however, a story focused on that theme wouldn’t do well to help the company find a new suitor. When faced with these alternative stories, portraying the problem on the unions was probably the best way for them to deflect blame while keeping the door open to a new buyer that believes they can address the labor issue.

When you have a business communication to address, sometimes you get to choose what the lead in story and news will be – more often if you proactively make an announcement or hold a press conference. If this is the case, best to take advantage of this opportunity. Other crisis communications, such as an oil drilling platform explosion and fire, can’t really be modified to give it a good “spin.” Over time, if your story has more to it, then it is most likely that the rest of the story will follow. But, it will be secondary to the original announcement, which might just buy you some time to get through your crisis, should you have to experience this type of announcement.

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+.

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Communicating Pricing in a Multi-tiered Distribution Model

It is no secret that companies regularly charge different prices for the same product. Just look at the airline industry as one example. Nearly every seat has a different price, which can vary depending upon the day of the week, your status as a frequent flyer and how close the flight is to departure. The strategy behind this pricing decision is valid – lost seat revenue from departed flights can never be recouped. Airlines must try to fill every seat for the highest possible rate to maximize revenue. This pricing dichotomy can create a potential communications challenge, but only if the rationale behind this difference isn’t reasonable.

I would propose that the car rental industry’s pricing strategy doesn’t make sense, and as a result, that industry is communicating poor messaging resulting in a loss of consumer loyalty and repeat purchases. Speaking from my own experience, I see the purchase of a rental car as a commodity item, one that is identical regardless of what provider I choose to patronize, with one exception – Enterprise. They will bring the car to you. This is great service, and truly a competitive differentiator.

Here is my source of confusion – if you take the time to create an online profile with your preferences, including personal identifying information about what you like to rent and where you like to rent, this privilege you are bequeathing to the car rental company comes at a price – you are charged a higher rental fee! One might think that a “preferred” member should at least be given a coupon or some sort of advantage for going through the hassle of creating the online profile..

Let’s assume there is some sort of loyalty program that gives repeat buyers a discount. If that were the case, then the choice to purchase through a third party might be worth less to a car rental company – a commission must be paid to these purchases, reducing the economic value of such a purchase. The reality is just the opposite, and the price difference is unbelievable. At Hotwire.com, I can rent an economy car for $15 per day, provided I can create an alert and check back periodically to when that rate comes available. Alternatively, if I go directly a car rental company and try to book the same car, the price is about $80-$90 per day, for the same period, same location and same type of car, a rate increase of 400-500% higher. The only difference is that the $15 rate is non-refundable, so clearly there is some value in being able to cancel without penalty.

Perhaps, this is a reasonable pricing decision and worthy from an economics perspective to continue this practice. I don’t know, as I am not privy to this information. My point is that from a consumer messaging and business communications perspective, this discrepancy simply doesn’t make sense. For example, the car rental companies could offer a “refundable” and “non-refundable” rate, if that is indeed the source of the extreme pricing difference. Then, it starts to make sense.

In the same way that an empty “seat” on a flight represents revenue that will never be recaptured, rental cars sitting on a lot overnight represent the same opportunity cost. Clearly, a multi-tiered pricing strategy is logical. The challenge how do you execute a sensible pricing and communications messaging strategy that can be a win-win for both the company and its customers?

Does your business or industry have its own pricing “nuances” that only you, as an insider, understand? If so, maybe it is time to fix them.

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+.

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Color’s Role in Business Communications

Did you know that there is a blog entirely focused on color combinations, and that they have over two million different color palates listed? I am in awe! When I discovered this site, the first thing that I thought of was how much we take color for granted today, at least in business communications. It wasn’t that long ago that our business and home printers could only print in black and white. Just like the evolution of television sets, black and white was first, followed by color.

If you are not leveraging color to your advantage in your marketing communications, then I would propose that you are not using every available option to make your content stand out.

Some colors clearly have a connotation tied to them. Take “green” as an example … we all know what it means to be green with regards to sustainability and recycling. As a marketer, your use of green should not contradict any pre-conceived notions your target audience already has about what green means.

I have always been puzzled why so many businesses believe that “blue” is the best color to use in logos and other communications. The belief is that blue is a color that indicates being serious about your business. Maybe this is an evolution from IBM being portrayed as “big blue,” and that the largest stocks in the NYSE are considered “blue chip” companies. I have read that from a psychological perspective, the color blue connotes a feeling of warmth and strength, and can indicate confidence, reliability and responsibility. These seem all good attributes to be part of a successful business brand.

“What has brown done for you?” is one of the more memorable ad campaigns that UPS has executed upon, which was clearly focused on associating their brown trucks to their business. This was a brilliant communications program – it could not be copied, had an element of humor and reinforced their brand. In fact, the phrase was a tagline at one time. Sadly, it appears they have ventured away from that phrase to something more generic and boring. Here is a link to one of their better ads.

For those of you selling to the women’s market, “pink ” has to be one of your favorite colors. It is the international color of girls, and is quickly recognized as representative of products and services tied to this market. In some respects, “blue” is also associated to boys, at least as infants or toddlers, but, once we grow up, not so much!

For those of you who are interested, here is a link to a great color blog post that talks about all of the other psychological color connotations and meanings, which will let you gain better perspective on what non-spoken communications are tied to your choice of color.

What is important to understand is that each color has a reference point and a connotation that already exists in your target audience. As a marketer, it is our responsibility to be aware of these pre-conceived notions to be sure we leverage the right color for the right business communication.

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+.

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Measuring the Value of Outdoor Advertising

As a marketer, you must make many choices on not only what your primary message should be, but also on what medium is the best to communicate your vision. I just read an interesting article in the Wall Street Journal about a nice win that the NASDAQ just pulled off – getting Kraft Foods to drop their big board listing on the NYSE to go instead with a listing on the NASDAQ (see article here). I can only image what the lead time and typical sales cycle is for such a decision, as it is clearly more than just a simple administrative change such as switching banks. Beyond the logistics of such a change, there is clearly a message at play – Kraft wants to be seen more as a company that is closer aligned with the technology companies that now dominate the listings on NASDAQ.

Stepping aside from that whole decision process and what was involved in closing the deal, the point that got my interest was when I read about what was publicly stated as the key reason that Kraft made the swap. According to the article, it was “the prospect of cost savings and the marketing visibility afforded by NASDAQ’s landmark advertising billboard in New York’s Times Square.” Cost savings in today’s economy is certainly justifiable and reasonable. What was interesting is the reference to the billboard that NASDAQ has in Times Square, which I am sure each of you has had the chance to either see either on TV or in person.

Wow. So, what Kraft is essentially saying is that this outdoor advertising venue was the tipping point that pushed them to close the deal. A couple of questions and comments come to mind here. First, what benefit is Kraft really envisioning? Increased brand awareness? I think that pretty much everyone in the world has now heard of Kraft Foods, so that clearly can’t be the case. How about awareness of what Kraft stock can be purchased for? In today’s digital world of price tickers, I have a hard time believing that it is this type of awareness that they are talking about.

I would propose that the awareness they seek is being viewed as part of the NASDAQ’s group of more tech-heavy, startup type of companies that are more typically on that exchange versus the NYSE. But, this message simply wasn’t part of the article. Maybe NASDAQ is trying to expand their positioning to be more than just a home for tech firms, and this was a way for them to point out other reasons for making the swap? If any of you have any background info that can help explain this decision, your comments and feedback would be most welcome!

So, there you have it. The decision to pay millions (?) of dollars a year by NASDAQ’s marketing team to keep that lease or own that real estate with its prime placement in Times Square actually led to a sale, which can now be tracked directly to that investment. The next question is: “Did the marketing team put this into their ROI calculation to help justify the expense?” There probably was some sort of awareness factor, which then translated into some sort of increased branding … but, to actually get a sale as almost a direct impact from the billboard / outdoor sign? I am guessing “no.”

In concluding, first, I hope that the marketing team at NASDAQ saw the article and is now pointing it out to their executive team. Second, I am not endorsing a marketing campaign composed entirely of outdoor advertising – an integrated approach covering multiple channels and awareness media is best. Third, to those thinking that there isn’t really any value to brand advertising and that any quantifiable new sales are not really possible from such expenditures, maybe that assumption isn’t quite always the case!

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+.

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The Role of Pricing in Messaging

“If you have to ask how much it costs, you probably can’t afford it”

– JP Morgan

According to Google books, the origin of this quote is a conversation JP Morgan had with a neighbor regarding the purchase of a yacht. The quote has been made famous by Henry Royce, when applying it to the purchase of his Rolls Royce automobiles.

Importance of pricing on messaging and marketing communications

If you have to ask, you probably can’t afford this toy.

From a marketing communications perspective, the concept is actually quite compelling – a message that rings loud and clear to your prospective customers. If you must know the price before purchasing, then it is probably too luxurious for you. A purchase decision that falls into this type of classification is clearly high end, something that only the wealthy need consider. As a business strategy, if you are selling a high end product, this type of positioning could be just right.

Pricing plays a critical role in your messaging and marketing communications surrounding not only the quality of your goods or services, but also on your focus on customer satisfaction. Do you deliver consistently superior results that your customers can justify spending more for your product? If so, then you should be charging more, and your customers will pay more, helping you to preserve your brand integrity. It is all part of a consistent message that you, as a marketer, need to convey to each of your current and future customers.

Alternatively, if your product is “me too” (non-differentiated) or if you are the low price leader, then you have no claim to charge a premium and shouldn’t. If you do, your customers will be confused, and will likely not justify the higher price, preferring instead to purchase from your competitors.

BMW is an excellent case study on how to leverage pricing as part of their messaging. Back in the 1970s, the brand was not considered premium, akin to the likes of Volkswagen. In the 1980s, however, they made a decision to dramatically increase prices across all products at a time when their marketing communications shifted towards positioning the brand as premium. It worked.

I had an interesting experience with the AAA club of Southern California about a month ago. I inquired about purchasing their premium service, which included expanded towing coverage. They refused to sell me the service, stating that I must first purchase their standard service for a year and not use it before having the “privilege” of purchasing the premium service, for more money. Needless to say I was infuriated. Here I thought they were eager to offer expanded, higher margin services. They, on the other hand, see themselves as a “country club” of sorts, where I have to pay my “dues” for a year before being considered for an upgrade, like they are doing me a favor. Talk about a confusing messaging strategy!

How does AAA get away with it? Well, it turns out they have a bit of a monopoly in the Southern California market, so there really isn’t a viable competitor. Clearly, not only is their pricing calculated incorrectly, but their view on customer service is that of a monopolistic organization, such as the US Post Office. In other words, it isn’t a priority. Even to a customer of 31 years!

To conclude, pricing plays a critical role in your marketing communications – the story you want to tell. Are you customer friendly? Are you premium? Or, are you a generic product with no differentiation other than price? Pick your story and be sure to set your pricing to support that message.

 
Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies. Gordon can be found on Google+.

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