On Creating a Premium Brand
Saturday, February 25, 2006
My past few months have been peppered with several conversations around the creation of premium brands, and I’ve decided to pen some opinions on what really constitutes components of a luxury brand, specifically as it applies to consumer products and the retail experience.
First of all, “luxury” isn’t what it used to be. Credit cards and the function of borrowed equity have created opportunities for purchase that no longer allow luxury brands to be defined just by the demographics that buy their products and services. In 2005, more people filed for bankruptcy in the US than graduated from college. People live on the borrowed edge, and communication vehicles are so disjointed now that it is impossible to catch one customer at all her accessible points. Heck, we don’t even know what they are anymore.
In the future economy, luxury brands are not going to be those that just sell at a premium price and have celebrity endorsements. Luxury brands are going to be defined by a combination of innovation and image, where innovation can be either within the product or the services that surround the purchase process.
Prada acknowledges this, and the retail experience in their 5th avenue store uses RFID tags to create tangible, awe-inspiring value in the shopping process—translucent dressing rooms automatically darken when you enter, and the tags automatically bring up images of other products in the store that match the choices you’ve brought into the dressing room.
In general, when a brand has a high-end image but supplements that image with high innovation, a premium brand can be built because the perception of value exceeds the price paid for the product. With low innovation, it then becomes incumbent upon the brand to build a significant amount of trust with the customer in order to justify higher prices. This is why, for the most part, luxury brands that currently thrive without much service or product innovation have mostly been established several decades ago.
Every situation is different, and there is no specific blueprint for the creation of a new premium brand. However, the consultants at Booze-Allen published these four key parameters, which I generally agree with:
- Distinction: Something that is differentiating from mass brands and not just a created image. For example, in the gifts category, Red Envelope uses its “product story” and red gift box and clearly differentiating elements. So much so that you must pay an additional $4.95 in order to GET that red gift box with your order.
- Communication:Specifically, word-of-mouth, and not advertising. Premium brand customers believe other premium brand customers, and brands that capitalize on the stories that enter the cultural ecosystem tend to do better at creating a luxury brand faster. SKY Vodka capitalized on the rumor that their vodka caused less hangovers than other competitive brands.
- Tangibility of the Retail Experience: Premium brands require a premium experience at the point of sale. Steve Jobs knew that he wasn’t going to be able to get most department or electronic stores to truly represent the brand he was creating, and therefore decided to launch individual, company-owned Apple Stores that had a very distinct shopping experience that supported the brand.
- Pricing: Of course, pricing for luxury brands must reflect the intended premium status and should therefore be higher than mass products in the same category, regardless of uniformity in manufacturing costs.
On Losing a Pitch
I lost a pitch today.
It’s the first competitive, RFP-based pitch that I’ve lost in 6 years and 2 months. It’s the first overall pitch I’ve lost in 2 years and 6 months. Interesting numbers, if you think about it. Reversed, in my reversal of fortune.
Those of you who’ve worked with me know have some idea of why this has hit me so hard. For one, I hate losing. For another, I put more into pitches than most other firms put into entire projects or campaigns. I eat, sleep, breathe and dream about the client. I find ways to do interesting research. I call in special resources who have specific talent that will help the specific client. For this particular client, I spent eighteen hours non-stop in a hotel room in Las Vegas on December 24th, while my wife had to go out by herself. Because of the holidays and a lack of people available for the pitch, I personally came out of design retirement and helped with the mockups. To meet deadlines, and to still acommodate the enormous amount of work I wanted done as part of the pitch, I enlisted production resources in our Ukranian offices so that people were working 24 hours a day.
When I lose something like this, I take it personally. It feels like really horrible rejection from a girl that didn’t see the best parts of all you have to offer. It’s momentarily debilitating.
And for all that work, I got the rejection by email. Of course, you always know. It’s when your phone calls, which were previously picked up on first ring, are caller-id-ignored. It’s when there are awkward silences in the phone calls leading up to the final rejection. It’s when one client says that they’re still making their decision, but it’s really another client’s call. I understand, though. Noone really likes to give bad news. Noone likes making that phone call. It’s easier to craft a well-written email, and let the rejection sink-in that way.
Curiously, my winning competitior is a “small, boutique firm” that’s in the same remote city that the deciding VP is moving to his new location from. Originally, I was tempted to dismiss the loss as a loss to a prior friendship or relationship. But that’s too easy, and that’s shirking from my own failure.
I realized today that I take my work very, very personally. It wasn’t as evident to me before, but as I sit here, astonishingly depressed in my bed, I understand what makes me good at my job also makes me vulnerable to getting irrationally hurt. I wear my work-heart on my sleeve, and this time, no amount of creativity, conversations, and pre-work was good enough to win.
I was beaten, and it sucks.
Looking for “Krish Menon”?
Saturday, January 07, 2006
I was going through my blog referral list, specifically from search engines, and I realized that many of you who Google me still use “Krish Menon” as my official name. Just as an FYI, it’s easier to find more relevant hits if you searched for “Krishnan Menon”, which is what I go by professionally. “Krish Menon” is what I go by informally.
So, to recap, it would be: “Hey there, Krish Menon, how’s it hanging?” Or, it would be: “Introducing Krishnan Menon, etc.”
Fo those of you who think I have gone bazookas, I was merely attempting a minor bit of SEO. Now, back to your regularly scheduled program.
Recognize This?
Thursday, January 05, 2006
So, I live with two women. One’s my wife and the other’s my sister-in-law. Suhani’s been staying with us, interning at my agency, taking photography classes (she’s amazing with an SLR,) making friends, and doing all the things that smart, beautiful, talented 21 year-olds are supposed to do.
I’m on the road four days a week for work, and have this habit of buying DVD sets of TV shows so I can watch them on longer plane rides. Recently, while I was away one week, both sisters decided to start watching season one of Alias, the adventures of Sydney Bristow and her band of merry spies. It’s gotten compelling enough that they’re now in the middle of season 4, and any time is Alias time. So, there I am, on our bed with my laptop while they’re both sprawled across eating Doritos and intently watching for the next shocker.
If you’re the one person who hasn’t seen the show, it’s a rolicking set of implausible costume changes and spy-meet-cutes, with more plot twists over the past five years than there exist numbers. The best part of the show (for us, anyway) is Marshall, the funny Ops Tech guy, a modern day version of Ian Fleming’s “Q”. We especially like things like the super-fast photo recognition software that matches faces in an instant.
While I’m sure things like that exist somewhere, imagine my surprise when I found this. Riya.com is photo-recognition for the masses. Identify your images on your hard drive and sites like Flickr, train the software to recognize certain faces, and it will start finding other images on the Web and in your collection that have those specific people you identified.
It’s still in Alpha, but imagine the possibilities!
New Years: Our Greatest Personal Marketing Feat
Tuesday, January 03, 2006
A snowstorm of white vows. I once read that phrase describing how most people begin the New Year. For some reason, we’ve come to accept New Years as new beginnings; more so than our own birthdays, anniversaries, or any other more personally signficant date.
What is it about the New Year that makes us stay up till 5AM, kiss strangers on the mouth, drink like alcoholic fish, make tons and tons of resolutions, and feel like we hve a new lease on life? A survey conducted by the Reader’s Digest in 2001 showed that 73% of American’s felt most “hopeful” on January 1. The same survey also showed that nothing significant ever happened in December to truly warrant that hope.
This is all, of course, rhetorical. We humans live for signs. Faith in symbolism is prevelant in even the least conforming of us. And “January 1” is about as large as a symbol or sign that one can put up anywhere—it is universal in its forgiveness, and unfailing in its approach. So much so that I know a gentleman in New York named Ken Walker who trademarked the date 01-01-00, and sued anyone who used it in the context of the millenium for royalties. Even hope, therefore, is marketable!
82% of Americans have some form of a “New Year’s resolutions” list. In their heads, on a napkin, in their diaries, on their hands, or in their hearts. Less than 2% of them will see all the resolutions through. Why? Life happens. Interestingly, though, it is us, as marketers, who cause most of the resolution drop-offs. That’s because the majority of resolutions Americans make have to do with restricting consumption of something (or someone.) I will stop smoking by March. I will lose 30 pounds this year. I will spend less on Internet porn. I will pay off my credit cards. I will eat at home at least three days a week. I will stop making up with my ex-boyfriend. I will… I will…
And then along comes temptation in the form of a credit plan with no monthly payments for eighteen months; in the guise of a buxom virtual blonde with “click me” streaked across her airbrushed torso; in the sweetness of fat-free yogurt (which, impossibly convinces most eaters that they will gain no fat by consuming it); and in the sight of two dozen roses on your doorstep from a man who fucked someone else just last week.
I’ve always maintained that marketers are born. That’s not because I believe there’s a specific, innate talent that some of us emerge without. It’s because we’ve been marketing to each other and ourselves all our lives. Every half-truth, every justification, every lie, and every blind eye we turn is part of our personal marketing plan. And New Years, my friend--note the capitalization--are our biggest personal campaigns yet.
Still, there is something romantic about the notion of creating resolutions that will probably never be carried out in their entirety. It feels good. It feels like you’re in the driver’s seat. It’s empowering. New Years bring about a sense of security and forgiveness. Not that you’ve forgiven anyone. It’s more like you tend to feel like you can contact that friend again, with whom you’ve had this horrible tiff, because she’s forgotten what a jerk you were last year. Or a perfect time to send one of those “sorry I dissappeared with your money” emails. This is us marketing to ourselves. We’re experts at it because, face it, no knows this customer better than we do.
And so this year, I’ll make some resolutions of my own. I’ll lull myself into a false sense of security about all mistakes being forgiven, and that anything is possible this year. (Which it would be, if I didn’t write any more commercials, or create anymore marketing campaigns--I’m going to become a victim of my own livelihood.) I’ll track these resolutions on this blog, and let you know how I’m doing. So, in 2006, I resolve to:
- Write at least 200 entries in this blog, with a completely radical idea once a month.
- Lose 35 pounds, and get a six-pack.
- Put at least 15% of my income into savings.
- Take two vacations.
- Apologise to and make up with an old friend.
In the meanwhile, as we begin this New Year, it occurs to me that I must thank you, who in spite of my sporadic posts, continue to find and read this, my little corner of the blogosphere. We’ve all had a stunningly eventful year. The rebirth of suede; the tragedy of a tsunami; the destruction of a hurricane; the idiocy of a president; the true advent of Web 2.0.
My own life has been a smorgasbord of changes: the loss of a brother, a marriage, a new hobby.
So this year, here’s hoping that life is a panoply of pleasant surprises for you, me, and all the others we know and care for.
Dare I say it? Why not? I am, after all, feeling optimistic.
Happy New Year.