On Becoming a Premium Brand
Premium brands: They exist everywhere, and some of us might even consume their products daily. Brands that are considered premium brands are capable of charging more because, ideally, their products are better than the less expensive. These brands range anywhere from car manufacturers (BMW, Mercedes Benz, Bentley) to technology companies (Apple, Bose) and even as far as food and drink companies (Whole Foods, Starbucks, Grey Goose).
And though all of these companies, in some way, offer superior products — whether they are well made or just, well, tasty — they have managed to create extremely profitable markets out of things that we, until they came along, never really needed. Before luxury car brands like Mercedes Benz or BMW existed, there was never really a reason for us to own luxury cars with plush interiors, and enough technology to baffle even the biggest tech nerds. Before Apple, we never really yearned for super-thin laptops and tiny MP3 players. And before Starbucks, coffee was just coffee. Fancy frappamochachinos weren’t really a thing.
But what all of these companies did, essentially, was tap into our own senses of intrigue and vanity and asked the question, why not? And truthfully, nobody told them, “because, so and so”, because if they had, these brands wouldn’t exist.
Here’s how premium brands are made.
Develop a Great Product
Successful premium brands exist not only because they have some sort of allure or mystique surrounding their particular brand, but also because they, more often than not, build great products. Compare any BMW to even a quality car brand like Toyota, and you’ll immediately notice a difference. The interior of the BMW is probably more aesthetically pleasing, it’s most likely quieter, and it rides and handles brilliantly.
Of course, these two things get us from A to B perfectly adequately. They are both cars, after all. The difference, though, is that the BMW has the reputation of being the nicer, more luxurious of the two. In every sense of the word, BMW is a premium brand that develops premium products. And because of that, buyers are willing to spend thousands, if not tens of thousands of dollars more for essentially the same function.
This comparison basically holds true for every other premium brand: Build a great product that works well, and people will be willing to pay more for it. Because the idea of a premium brand is that because the product is more expensive, it will be superior quality, people are generally willing to spend extra money in order to fill that gap in quality.
Don’t Be Afraid to Lose Sales
Premium brands exist because, generally, when a product is superior (or at least appears superior), people will spend more for it. What that also means is that some premium products might be out of the price range of some consumers. With a large price tag, there generally exists the notion that the product is superior.
But for premium brands, it’s okay and it should be expected that the product won’t be for everyone. If the product is good — great, even — and well marketed, people will purchase it. Trying to compete on price with lesser quality brands is, more often than not, a foolish thing to do. Why? Because real premium brands are competing on quality, not price. They are more expensive for a reason.
Spoil Your Customers
There’s a reason why so many people shop directly at Apple’s stores, usually spending more than they would at an online retailer or elsewhere. Sure, one reason is because the stores generally look so appealing. But the primary reason is because in the stores (and even outside of the stores) they feel pampered and well-attended. In essence, everyone that walks into an Apple store is generally quickly attended to, and the one-on-one interactions with its Geniuses make customers not only feel welcome, but also encouraged to buy.
That sort of customer service is another important driving force behind premium brands. Not only do customers receive better quality when they purchase that brand’s products, but they also expect a level of care that wouldn’t be possible for a less expensive, price-conscious brand. They are paying more because they want better quality and better service.
Sally Hogshead, in her book Fascinate, discusses a lot of these premium brands and how they capture the minds of consumers in order to charge more for something that consumers don’t necessarily need. She concludes that successful premium brands are able to maintain their success because they aren’t necessarily concerned so much with price as they are the experience surrounding their own brand.
So for any successful premium brand, focus on the quality, and not necessarily just the price. That, in turn, will yield greater results when it comes to the matter of actually selling those products at a premium price.