Christopher S. Penn – Marketing AI Keynote Speaker

The problem with premium

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by

Christopher S Penn
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Starbucks.

Apple.

Maglite.

Dom Perignon.

All of these are premium brands, yes? They conjure up certain images, certain feelings, certain associations, all of which their respective marketing departments have worked hard to establish over the years. Premium denotes quality of product or service above average, a product you can aspire to as a consumer…

… unless you’re in the middle of a brutal recession. Suddenly, premium becomes a boat anchor around your leg as consumers seek out thrift, value, cost-conscious… cheap.

Sometimes premium can override cost concerns – the old “quality costs less in the long run” hack – but sometimes, it will just kill you.

As a marketer, think carefully about how your brand will be perceived in good times and in bad. Is there a brand association durable enough that it’s appropriate no matter what the economic climate is? Can you play the trend of the day in your communications while staying true to your core value proposition?

Here’s a tip: invest, invest, invest in your customer service, and by that I don’t just mean your call center, I mean every employee in your company. Service costs money, absolutely, but great service endures good times and bad.

When times are good, people love the personal touch and are willing to spend more for great service. When times are bad, people want to stretch the dollar as far as it can go, and if your product or service has value and can be backed up with great service (think a warranty w/a toll free number that humans answer on the second ring), you will endure when everyone else goes out of business.

Great customer service pays huge dividends. You can get more return out of great service than all the PR in the world, because in the uber-connected 2.0 world where everything is online and simultaneously service nearly everywhere borders on abusive, your great service will be worth talking about.

Great service, in other words, is a premium, a premium that will lend a shine to your brand no matter what’s happening in the world – and that’s worth paying for.

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Comments

12 responses to “The problem with premium”

  1. Katy Avatar
    Katy

    I agree 100%. I work with GEMaffair.com

    Reply
  2. Julia Chanteray Avatar
    Julia Chanteray

    Funny how all the “Taste The Difference” and other premium brands have suddenly changed from amost everything being labelled premium (so there's nothing to differentiate the premium product from) to “Basics” brands. I'm guessing the product inside is just the same old stuff.
    People have become more discerning about how they view premium, and will still pay for good service, but won't be bothered about getting a platinum card, or being a VIP, unless this is proven by there being something real and substantial behind it all

    Reply
  3. Whitney Avatar
    Whitney

    There's a great book out there called Buy-ology that talks about some of this- like the difference in feel and value for a Bang & Olafson remote is all about the additional weight (literally, a hunk of metal) they put in it to add “substance” to its feel.

    Sometimes perceived value is just perceived- we've drunk the koolaid. Other times, there are real and substantial differences that make sense to some consumers. For example, we bought a real wood dining table rather than the one made out of MDF with veneer, because we wanted real wood that would last through the ages. The people trying to sell us the cheaper, MDF and Veneer table pitched “made from space-age materials” at which point I said- “I want to feed my grandchildren Thanksgiving dinner at some point in the future at this table, not send it up in the space shuttle.” The difference in quality was important for something I want as a possible heirloom. It's not as important, per se, in a flash drive, which is easily and cheaply replaceable.

    It all depends on your metrics and whether the quality and the service that backs up the alleged quality work for you.

    Reply
  4. Emil Wisch Avatar
    Emil Wisch

    Love the post, Chris. We feel the same way at crowdSPRING. We're a small company and customer service is at the core of everything we do. We strive to keep getting better.

    Emil

    Reply
  5. Katy Avatar
    Katy

    I agree 100%. I work with GEMaffair.com

    Reply
  6. Katy Avatar
    Katy

    I agree 100%. I work with GEMaffair.com

    Reply
  7. Julia Chanteray Avatar
    Julia Chanteray

    Funny how all the “Taste The Difference” and other premium brands have suddenly changed from amost everything being labelled premium (so there's nothing to differentiate the premium product from) to “Basics” brands. I'm guessing the product inside is just the same old stuff.
    People have become more discerning about how they view premium, and will still pay for good service, but won't be bothered about getting a platinum card, or being a VIP, unless this is proven by there being something real and substantial behind it all

    Reply
  8. Julia Chanteray Avatar
    Julia Chanteray

    Funny how all the “Taste The Difference” and other premium brands have suddenly changed from amost everything being labelled premium (so there’s nothing to differentiate the premium product from) to “Basics” brands. I’m guessing the product inside is just the same old stuff.
    People have become more discerning about how they view premium, and will still pay for good service, but won’t be bothered about getting a platinum card, or being a VIP, unless this is proven by there being something real and substantial behind it all

    Reply
  9. Whitney Avatar
    Whitney

    There's a great book out there called Buy-ology that talks about some of this- like the difference in feel and value for a Bang & Olafson remote is all about the additional weight (literally, a hunk of metal) they put in it to add “substance” to its feel.

    Sometimes perceived value is just perceived- we've drunk the koolaid. Other times, there are real and substantial differences that make sense to some consumers. For example, we bought a real wood dining table rather than the one made out of MDF with veneer, because we wanted real wood that would last through the ages. The people trying to sell us the cheaper, MDF and Veneer table pitched “made from space-age materials” at which point I said- “I want to feed my grandchildren Thanksgiving dinner at some point in the future at this table, not send it up in the space shuttle.” The difference in quality was important for something I want as a possible heirloom. It's not as important, per se, in a flash drive, which is easily and cheaply replaceable.

    It all depends on your metrics and whether the quality and the service that backs up the alleged quality work for you.

    Reply
  10. Whitney Avatar
    Whitney

    There’s a great book out there called Buy-ology that talks about some of this- like the difference in feel and value for a Bang & Olafson remote is all about the additional weight (literally, a hunk of metal) they put in it to add “substance” to its feel.

    Sometimes perceived value is just perceived- we’ve drunk the koolaid. Other times, there are real and substantial differences that make sense to some consumers. For example, we bought a real wood dining table rather than the one made out of MDF with veneer, because we wanted real wood that would last through the ages. The people trying to sell us the cheaper, MDF and Veneer table pitched “made from space-age materials” at which point I said- “I want to feed my grandchildren Thanksgiving dinner at some point in the future at this table, not send it up in the space shuttle.” The difference in quality was important for something I want as a possible heirloom. It’s not as important, per se, in a flash drive, which is easily and cheaply replaceable.

    It all depends on your metrics and whether the quality and the service that backs up the alleged quality work for you.

    Reply
  11. Emil Wisch Avatar
    Emil Wisch

    Love the post, Chris. We feel the same way at crowdSPRING. We're a small company and customer service is at the core of everything we do. We strive to keep getting better.

    Emil

    Reply
  12. Emil Wisch Avatar
    Emil Wisch

    Love the post, Chris. We feel the same way at crowdSPRING. We’re a small company and customer service is at the core of everything we do. We strive to keep getting better.

    Emil

    Reply

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