Price-Only Stratagies Are Way Too Expensive

There is a scary belief running rampant through the inexperienced business community that, in the midst of a crisis, branding is too expensive and the only option is to push low price instead of value.

It’s also an odd cultural concept here, because most of the world has figured out that the truly expensive option is to completely forget about customer value while you drive low price. Especially when you come to realize that it isn’t any more expensive to continue branding while offering price.

Let me explain by example.

Not too long ago, I had a conversation with a young marketing manager for one of Bucharest’s foreign-invested, Romanian-managed malls. We were deep in mid-crisis, and the young manager proudly held out his agency’s latest marketing effort - a full color A5 catalog.

It was shiny. It was chock full of ads for nearly every store. It had pretty pictures. It had bright colors. It screamed Low prices! Low prices! Low Prices! Which, in fact, were probably at a par with prices at all the other Malls in Bucharest that had opted for short-term survival at all costs. The catalog also talked hours and undistinguished shop names. (You know them. They are duplicated in nearly every mall from Dubrovnik to Dubai.)

Did I mention that to print and publish it cost Three Hundred Thousand Euros!? Yikes!

And nowhere in the entire catalog of star burst discounts did it ever bother to mention why, besides price, you should come to this mall!

Or come back to this mall. It didn’t say fabulous shopping experience, or more fun, or convenient parking, or great food, or a thousand screen movie-plex, or envious friends or an upstairs zoo (I exaggerate for emphasis. They don’t have a thousand screen movie-plex or an upstairs zoo.)

Did it drive traffic? Possibly. Did it bring anyone back to the mall to shop again when the prices were back to normal? Highly unlikely unless you live in the neighborhood. Did this catalog do a single thing to position the mall as something extraordinary and welcoming any time? Not a bit.

The point is that in a 24 page catalog, there is a lot of room on the edges, in the introductions, in the flags on the corners, to proclaim the reason you will continue to be relevant and important to your customers. This is true of any communication you send to your customers via broadcast, print, sms, or carrier pigeons. If your message comes from the point of view of your brand, it costs no more to send the message.

Whether you are retail, B2B or product, selling only on price destroys loyalty. Your price-only customers will be gone when the bargains are. Off to the next better offer.

Your brand, however, stands for who you are and what you mean to your customers. It explains your essence, and your philosophy. It reassures your customers that you stand for something besides just taking their money. Important things like integrity, honesty, product quality, value, customer service. It’s why they do come back even when the discounts are over.

In tough times like these, survival is key. So you do what you have to in order to keep customers coming in the door. But if your marketing department or any of your agencies is bringing you any piece of communication that doesn’t speak from the essence of your brand, it's too expensive. Send it back for a do-over.

It doesn’t cost you any more to let your brand speak your price advantage in the short-term. And the price of not doing it could close your doors in the longer-term.

Happy Brand New Year.

Have I been yelling at you loudly enough about restarting your Marketing/Branding RIGHT NOW? Well, here I go again.

The news for Romania isn’t all that good. For the past six months I have been hearing from financial friends in New York and Washington that Romania would get through the ‘crisis” better and faster. I sang my optimistic mantra for survival: “Merrill Lynch says we’re one of the best foreign investment countries…tra la.” Now my friends are singing a different tune for here.

Cushman Wakefield agrees and now points foreign investment to Poland and Russia. Construction & Investment Journal says it’s already started. If this continues, then laggard companies here are putting their businesses on the line by waiting to trumpet their value.

I hope you are taking your usual 10 percent of turnover for marketing and doubling it. You need to get the contracting market to remember you. And you need to get existing customers to love you even more -- enough to stick with you.

I’ve been sifting through new consumer behavior information from Western and Eastern Europe, and the US to find what might help you to know for here. Here is what’s relevant:

Be the Downturn’s uplift – Ordinary people suddenly used to freedom of purchasing choice still want to buy luxury , but in smaller things. So they may sacrifice buying a new car or a truckful of IKEA but will treat themselves to higher end wines or better chocolates. Marketers of smaller high end items shouldn’t be taking their products down price or down-market, but should be shifting to higher targets to whom your product looks like a better value than a whole new house.

Be The Second Most Valuable - On the other hand, the recession has restricted the affluent’s ability to indulge in top-of-the-line goods, so lower cost luxury alternatives are popping up to semi-satisfy them. And guess what? They’re buying the second, cheaper tier.

Be willing to Barter - Credit-crunched citizens are swapping, bartering and trading for goods and services. Offering customers the ability to trade instead of pay offers a new way to connect with budgeting customers and can be applied on small or large scales. Be creative in the offers.

If they won’t buy it, they might rent it. - This is a huge business opportunity if you can turn your business plan in a new direction. Renting offers a trial before buying, a taste of something unaffordable, or even, not that anyone here would do this, the ability to fake status.

Unservice - Self-serve establishments save money by giving customers control. Forward-thinking business are putting some of their labor into the hands of customers, not only saving companies money, but also empowering customers by giving them a sense of independence and creative control. Among demographics that value customization and autonomy, unservice is a win-win for all

Make it a great Brand new year.

Seven 2010 Brand Success Trends

In a country where there is not yet a “normal”, dictating evaluations based on probable circumstances is impossible.

At this moment, Romania is entirely experimental.

Romanian branding is little more than guesswork. Universities teach out of date ideas borrowed from other cultures. Inexperienced graduates apply foreign principals that won’t work here - because here is evolving differently.

At year’s end it is the usual practice to review spectacular successes and phenomenal failures. As though the successful needed any more accolades or the fallen need further humiliation. But now, here, that won’t offer any useful insights.

So let me instead offer up interesting indicators for 2010. These are spotted trends that I do believe have branding relevance here.

1. Price Is Down. Value is Up. Romanians have recently had the euphoria of enough money and shelves full of what to buy. It’s an addicting habit that can’t survive the Crisis. Not that Romanians have stopped shopping. But the new discovery is getting their money’s worth.

2. “Try Anything. Buy Anything” is so over.

As too many generically equivalent products flood the market, the Brand Values communicated will serve as a consumer shortcut. What customers think about your brand will out-weigh nearly everything else in making value-purchase decisions. These choices will become their future standards.

3. “What’s So Different” will win. It will no longer be enough just to be on the shelves.Being meaningfully, positively different and communicating that difference will be the difference between live brands and closed doors.

4. If it isn’t in the product, don’t put it in the brand. Too many brands, in the hands of inexperienced marketing departments, have made claims that can’t be supported. As piata-savvy Romanians apply these skills in hypermarkets, discernable brand values must actually exist. Just because I said so, will in the future, just work with two year olds, not consumers.

5. Don’t Brand Global. Brand Local. Too many foreign companies are still shipping in their worldwide strategies. Romania is just learning consumerism. They don’t know yet how they are supposed to react. So any branding that doesn’t revise for the local experience and inexperience is risking it all on a questionable bet.

6. The “Tweet” and Twitter Can Kill The Brand. As Romanians embrace social networking and flock to FaceBook, the neighbors’ recommendation is replaced with online experience-sharing. Both Value and Hype are quickly communicated. If your product’s Brand Promise doesn’t measure up, fix the product before you invade the internet.

7. Everybody Says “I Love You.” There was a time, now over, when tugging at emotions would win. Now consumers only want to know who to believe. Who makes a good product? Who delivers on what they say? Who satisfies my family’s needs? And who can be trusted tomorrow?Set the emotional approaches aside and brand on value.

Only seven? Surely there are more!

Of course there are. But, with limited space, start with these. We’ll add new ones through the year. For now, examine your company practices and promises against these seven trends.

2010 could be a phenomenal set-up to success if the company is prepared, purposeful and trustworthy. Romanians are smarter than you probably give them credit for. They will see through exaggerations, misrepresentations and boasting. They have had years of practice seeing through to the real truth.