June, 2018 - Suresh Dinakaran's Blog

Your brand’s worth is in your own hands!

Your brand’s worth is in your own hands!

You do not have to look far ahead into the horizon to read that businesses are facing an uncertain economic landscape across multiple markets around the globe. We are amidst a landscape in which brand worth has never faced fiercer scrutiny.

Moreover, in this environment, a power shift has taken place as price-conscious shoppers have seized control. Price loyalty or brand loyalty?

The done to death strategy(dare we call it that?) that brands have been resorting to, to drive volumes has been, no prizes for guessing, discounting. Not only is it a short term strategy but it also does both the brand and the business serious damage in the longer term. Turning the model upside down, research has shown that a 1% price increase can drive a 12-15% increase in profit. That is three times the profit increase seen by boosting sales the same amount. Which shows that the commercial impact of protecting prices can outweigh cutting them to drive volume.

Just like most buying decisions are not rational, so is consumers perception of price, which too leans towards the irrational. Behavioural economics studies show that when you flip the context, re bundle your output and shift the focus from price to value through added layers of experience, consumers are willing to pay disproportionately more for it. This, in some way, also endorses the oft used observation that price is the yardstick of quality.

By combining data-led pricing strategies with the creativity and behavioural science of a modern agency(be it ISD Global or any other), brands can dramatically outperform the competition in a commoditised market.

Brands can increase their price perception in the eyes of the customer through a 3C Model of Create(through rituals, theatre, value added services)-Connect(establish a culture where customers are happy to pay more like Frappuccino from Starbucks)-Convert( Optimum sales balancing value and volumes, omni channel, something like what hotel chain IHG does).

For the community of marketers everywhere, it is time to seize back control of the most ignored, most impactful lever in the marketing mix: Pricing.

ENDS

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Time to change your default settings!

A legacy approach might be stifling you, without you even realising it.Best practices may not be that best(or better) at all. In fact there is scope to abandon best practice as the ‘ practice ‘ as it used to exist has changed altogether.

Your current marketing and customer strategies may unknowingly be rooted in old patterns. It may be time for a change.

The purpose of business—creating a customer—and your customers—at a human level—aren’t changing. That, irrespective of all the tectonic shifts happening around them.

But for many businesses, it’s time to make a change toward having a deep understanding of their true purpose and their customers.

The terms consumer and customer are often used interchangeably but they signify very different relationships. Etymologically, consumer stems from a word that means “one who squanders or wastes,” whereas customer stems from a word meaning “a person with whom one has dealings,” with the implication that it is an ongoing relationship.

As Stanley Marcus, of Neiman Marcus, wrote, “Customers are people; consumers are statistics.”

Marketing isn’t about selling to the customer; that’s a byproduct. As the legendary Peter Drucker observed, “The aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy.”

It’s the time to break old tendencies. Its the time to be aware, to rebel, to kill old habits and to seek change.

Not changing is a default tendency. Change the default settings!

Nothing else but ONLY only matters!

PM Musings:

In the perennial quest to conform and comply, and trying to beat everyone else doing the same, we happily concede defeat and give up on blazing our own trails. Running the ‘ also ran ‘ race. You might be doing okay by normal standards, but you still feel restless, bored, and limited. True success is playing by your own rules, creating work that no one can replicate. Trying to be the best will limit you to someone else’s definition of success. Don’t be the best, be the only. Only is much better than being the best. Whether you are Mark or Taylor, tailor your own mark. Make competition irrelevant.

Give into ONLYNESS. It’s next to GODLINESS!

ENDS