January 2, 2013

Must you compete on price?

Competing on price is evidence of branding failure.

The strongest brands don’t have to compete on price. Consumers happily pay 40% more for Morton Salt over store-brand sodium chloride. They’ll pay an equivalent premium for a famous deodorant over a chemically-identical price brand.

Is it just awareness? No. Some brands have high visibility, but that’s never enough. Awareness, although crucial, by itself will not get you into a buyer’s selection set. (Can you easily name candy bars or automobiles or political parties you’d never actually consider buying?) Not considered = never chosen, so you need much more than visibility.

After generating awareness two more deal-breakers lurk: differentiation, and relevance. Marketers all claim to have a Unique Selling Proposition that separates them from competitors. Sometimes it’s even true. But is that USP powerfully relevant to the target audience? Enough to motivate purchase?

Does it meet a real, urgent, emotionally resonant need? Are you certain your best prospects will really respond to you as the ______________? (Fill in low-cost provider, most expensive, most reliable, greenest, coolest, safest, highest-tech, simplest, first, latest, fastest, most luxurious, most practical, most responsive, closest, most convenient, blah, blah, or blah?)

The naive solution is to pretend to be more than one of those things, like that vast tribe of retailers who insist they offer quality/selection/lowest prices/service/kitchen sink. Fails every time.

The real answer is to stand up, stand out, and stand for something. One meaningful thing. Never be a commodity.