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Price Always Trumps Brand, But It Shouldn't Matter To Marketers
Posted on February 25th 2013
Let me preface this article by saying categorically I believe very much in the power of branding. I myself (isn't that redundant?) have worked on many branding campaigns for marketers and advertisers of all sizes and shapes. I know first hand the value of branding done right and done on a consistent basis i.e. staying true to a given brand's tone and voice over time.
But I also have been witness to a growing trend. A revealing trend that is bringing to the light the fact that more and more consumers are sacrificing brand loyalty for the best price on a given product, service, etc.
- 1/07/2013 - Is Brand Loyalty Dying A Slow And Painful Death? "Sponsored by AisleBuyer, a survey conducted earlier this year revealed that nearly 75% of consumers would switch brands if offered real-time discounts and promotions that were delivered to their smartphones in real time while they were shopping in a store."
- 1/09/2013 - The Most Powerful Brand Ambassadors In The World May Not Be Brand Loyal "A stunning 75 percent of women now say it’s important get the lowest price on everything they buy, up 12 percentage points. from 2008 and up 22 percentage points from 2004"
Consider the above Exhibit A and the following to be, well, you get the idea.
The following (below) relates to a little something I like to call social media. Perhaps you've heard of it.
The lines have been skewing for some time now when it comes to brand loyalty and social media and with each passing day that line is skewing more toward the almighty dollar or if not currency in the monetary form, some other form of currency for sure.
Then there's this (below) from a report put out by Forbes Insights and Turn late last year called “The New Rules of Engagement: Measuring the Power of Social Currency":
And finally and most recently, this below, from a survey conducted by PwC:
Not So Breaking News
If there is a marketer out there who finds all or any of this news to be "breaking" he/she may need to start considering other employment for this should come as no surprise to anyone.
Consumers are people, people. Get it?
In general they want the best deal, period. Now juxtapose that thinking over a failing or still-recovering economy depending on who you speak to, and price just becomes all that more important in the pecking order.
'Ah but Steve, what about those brands who can never win a price war for any number of reasons? Are they doomed to fail?'
No, of course they are not doomed to fail.
If, if they realize that there's more than one way to skin a cat or in this case win a consumer's heart, that is - which ties into the "why it shouldn't matter to marketers" part of the title of this article.
Obviously many brands consistently thrive and survive just fine without being the cheapest on the shelf. They do so for a myriad of reasons including something I like to call "quality." Remember the old "you get what you pay for" adage? Yeah, that kind of goes hand-in-hand with this thinking.
So there are plenty of marketers, brands and so on who wake up every morning knowing they cannot possibly win a price battle but they know there's a quality product so all is well in the world.
Not So Fast
The real winners in ALL of this will be the brands who come to grips with the fact that while price and quality will always play a role in a consumer's decision making process, it is the relationships they create with a consumer that will ultimately determine success or failure.
Make no mistake about it, we are or already are, in what Responsys CMO Scott Olrich referred to as "the relationship era" in an end-of-the year piece entitled Looking Back, Looking Ahead - CMOs Weigh In.
His exact quote was "We will see the beginning of what I refer to as “the relationship era” whereby marketers will move away from an acquisition first mentality to a relationship first one. Marketers will focus more on the entire consumer experience to build and foster a long term relationship with a consumer as opposed to just that initial purchase phase."
The brands who understand how to cultivate and maintain relationships with consumers will be the ones who reap the biggest rewards.
Photo credit: Wikipedia