Most people want premium. They want to be associated with the high quality, luxury and exclusivity that premium brands can offer. To be associated with the best names in the world. To show off their success, they usually buy premium products from premium brands. There is an expectation of grandeur about a premium brand. The goods and services are top quality, use the best resources, and train the best staff. When a brand starts off not knowing what they want to be, they usually veer towards premium. Think about it.
Many owners of small businesses want to be associated with something luxurious, something high-end. To be the owner of a high-end, successful business that offers premium products or services is something we covet for ourselves and inspired by the internet. The stories we read, the articles that go viral, the artists/entrepreneurs in the spotlight. They all influence us and our definition of what is successful. The same reason why kids want to grow up to be the strangest things, influenced by their idol at the time. It’s the same for people in their 20’s/30’s starting businesses. You see someone who influences you doing well and you aim to replicate their success.
So you strive to be a premium brand. Someone who offers ‘nice-to-have’ products. Aiming to sell to those with a bit more disposable income than others.
But, despite the drive to be a premium brand, why do I see people who claim to be a premium brand, do things that are only associated with discount brands.
A discount brand is one that punishes early buyers of your product or service by reducing the cost of the product or service after some time, or during some event etc. A good example of this is sales. As a brand, you release a product or service and charge €50 for it. Then after the initial release, the sales slow down, which is inevitable, so you run a sale in order to increase sales and make some extra cash for the month.
This is where you made a mistake. You are no longer a premium brand. The minute you run a sale, you’re inviting people into the mindset that you run sales, this is a thing that you do. Once you do it, it opens the floodgates. Even if you say you aren’t going to run another one, or that this was a once off. You have already broken the seal on your premium brand.
There is nothing wrong with being a discounted brand. It’s a good way to make some quick and easy money. People know what to expect and when to expect it.
Discount mindset is good if you are in it for the short-term. Your prices will generally be lower than that of a premium service because people are now expecting your products to be on sale a lot more. And this is the problem if you are trying to be a premium brand.
When you’re products go on sale, they are not perceived with the same amount of value as they would be if they were bought at full price. If this thing was on a buyers radar and they see it on sale, they will get the initial thrill of seeing it at the sale price and will probably buy it. You just have to hit them with it at the right time at the right place. In the design industry, this is typically common for design assets such as fonts, mockups, and texture/vector packs etc. You get the initial joy of seeing these things on sale, but then quickly forget about them after you use a handful of items in a 1,000+ item pack. As a buyer, I recommend separating these items into different folders, ones that you downloaded for free and ones that you bought. It will help separate them in you mind and allow you to credit value to the ones you bought and you may use them more. No one remembers the 6 free fonts you downloaded yesterday.
If you buy something, with real, tangible money, it’s likely you are going to remember it.
Their perceived value will be lower and the person who bought it will not care about it as much. When you pay for something at full price, you generally give that much value to the product or service.
This deters people from buying from you early and leaves a bad experience from those that already bought the product at full price knowing that they could have saved money had they just waited until the sale.
Premium brands on the other hand. Never hold sales and they never discount their products. If anything they increase the price of they products over time. Think about Apple. They never discount or put on sales through their website. Yet they are one of the most (if not the most) valuable companies in the world. Why is that? When we want to buy something good, we associate the brands values with their products. We know the brand produces premium products that will last a long time, change our life in someway, allows a social status of being part of an exclusive club [if somewhat imaginary] that owns a product from a premium brand. The product will maintain a lot of value for years to comes. And this is why people buy from premium brands.
We buy from both premium and discounts. We all want to keep expenses down. It’s an entirely different mindset. A discount brand promotes an ‘expense’ mindset and expenses are what we try to keep down. It’s a race to the bottom mindset where you compete with other products or services in that industry, prying and begging for people’s attention and money.
Whereas, when we buy from a premium brand, because a lot of the time we are spending more money on a premium product, we are shifting to an ‘investment’ mindset. It’s something that will bring us a lot more value and we attribute that perceived value based on the cost to that item.
“The true value of a product is the least amount anyone is willing to sell it for” – Seanwes.
Do you want to be a discount brand or a premium brand? You can’t have both the discount or the premium status. You need to embrace your brand/business as either. Go full in on the discounts, or go full-in of being premium. This creates a sea of mediocrity.
The biggest companies on the planet are premium brands.
The benefit of being a premium brand is that you build up a reputation of exceptional products with exceptional value. And when you have exceptional value, you build a loyal audience and customer base who are ready to spend money on your products when you launch something new because they know that it’s going to be the best price they will get it at.
What direction is your brand going to go in?