Clever branding and marketing can certainly play a crucial role in the success of a product or service. While it’s not the sole determining factor, effective branding and marketing strategies can significantly impact a brand’s visibility, customer perception, and overall sales. Here’s why branding and marketing are important:
Differentiation: In a competitive marketplace, branding and marketing help distinguish a product or service from its competitors. Clever branding allows a brand to develop a unique identity, positioning it as distinct and memorable in the minds of consumers. Effective marketing communicates these unique selling propositions, highlighting the benefits and value the product or service offers compared to others in the market.
Building Awareness: Branding and marketing are essential for creating awareness and generating interest in a product or service. Through strategic marketing efforts, such as advertising, public relations, social media, and content marketing, a brand can reach its target audience, educate them about the offering, and generate buzz. This increased visibility helps to attract potential customers and generate leads.
Consumer Trust and Perception: Strong branding and marketing can enhance consumer trust and perception. A well-crafted brand identity, including a compelling brand story, logo, and consistent messaging, can create a sense of authenticity and reliability. Effective marketing campaigns that communicate the brand’s values, quality, and customer benefits can build trust with consumers, encouraging them to choose the product or service over competitors.
Customer Loyalty and Advocacy: Clever branding and marketing can foster customer loyalty and advocacy. A well-established brand with a positive reputation and strong brand affinity is more likely to retain customers and encourage repeat purchases. Engaging marketing campaigns and strategies that prioritize customer satisfaction can turn customers into brand advocates who willingly promote the product or service to others, leading to organic growth.
Adaptability and Innovation: Branding and marketing also allow a brand to stay relevant in a dynamic market by adapting to changing consumer preferences and trends. Through continuous market research, branding can evolve to meet consumer needs and expectations. Effective marketing strategies can showcase product updates, innovations, or new offerings, ensuring that the brand remains competitive and appealing to its target audience.
While branding and marketing are important, it’s essential to note that they should be supported by a quality product or service. Clever branding and marketing alone may attract initial attention, but the ultimate success of a product or service relies on delivering value, quality, and meeting customer expectations.
Building a dream team requires careful planning and execution. Here are some steps you can take to build a successful team:
Define your goals: Start by clearly defining your objectives and what you hope to achieve as a team. This will help you identify the skills and expertise you need in your team members.
Hire for cultural fit: It’s important to ensure that the individuals you select for your team share the same values, work ethic, and goals. This will promote a positive and productive work environment.
Assess skills: Look for individuals who have a strong skill set that complements the rest of the team. Ideally, each member should bring unique strengths and talents to the table.
Encourage diversity: Diversity of background, experience, and perspective can bring new ideas and approaches to the team. It’s important to create an inclusive environment where everyone feels valued and respected.
Foster communication: Open communication is essential to any successful team. Encourage regular check-ins, team meetings, and opportunities for feedback and collaboration.
Empower team members: Give team members the tools and resources they need to succeed. Encourage autonomy and provide opportunities for growth and development.
Celebrate successes: Finally, celebrate the team’s successes and achievements. This will foster a positive culture and motivate team members to continue working towards their goals. Success also breeds success which makes it easier to attract better talent.
Organized labour associations are also known as unions. Besides the “for profit” aspect, unions exist to (supposedly) provide important benefits to employees, such as improved working conditions, job security, and fair compensation. However, as a business, if you are concerned about the possibility of unions forming within your organization, here are some steps you can take to help prevent it:
Address Employee Concerns: Ensure that your employees feel heard and respected. Conduct regular surveys and feedback sessions to understand their concerns and take action to address them.
Offer Competitive Compensation: Providing your employees with fair and competitive compensation can help minimize their incentive to join a union.
Provide Opportunities for Growth: Offer opportunities for career growth, training, and development within your company. Providing a clear path for advancement can help employees feel valued and invested in the company.
Maintain Positive Workplace Culture: Encourage a positive work environment by promoting open communication, transparency, and accountability. Make sure your company policies and practices align with your values.
Create an Employee-Oriented Company: Show your employees that you value their input and feedback by creating an employee-oriented culture. This includes fostering a sense of community, promoting work-life balance, and providing benefits that improve their quality of life.
Consult with Professionals: Consult with labor relations professionals, such as attorneys or consultants, to help ensure that your company’s policies and practices comply with labor laws and regulations.
The National Labor Relations Board (NLRB), the federal agency that polices labor-management relations, has accused Starbucks and Amazon of a slew of illegal anti-union practices, among them firing many workers in retaliation for backing a union. The NLRB had stated that Starbucks committed “egregious and widespread misconduct” in its dealings with employees involved in efforts to unionize Buffalo, New York, stores.
Remember that the best way to prevent unions from forming is to treat your employees fairly, with respect and dignity. By creating a positive and supportive work environment, you can help reduce the likelihood of unions forming in your business. Keeping unions at bay should not be the prime reason why employees’ working conditions and wages, among other circumstances, ought to be taken seriously. Staff are a crucial business element…and considered the fifth “P” in the modern marketing mix. Thus, they should be treated with respect and well taken care of. Common sense dictates that this should not even be a reminder to employers.
Brand management is the process of creating, developing, and maintaining a brand in order to achieve business goals. It involves establishing a brand identity, building brand equity, and ensuring that the brand remains relevant and competitive in the market. However, brand management strategies can vary depending on the type of brand being managed. In this article, we will explore the differences between managing a consumer-packaged goods (CPG) brand and a luxury brand.
What is CPG brand management?
CPG brands are typically everyday products that consumers use on a regular basis, such as food, beverages, personal care products, and household items. CPG brand management is all about creating a brand that appeals to a broad range of consumers and maintaining that brand in a highly competitive market. CPG brand managers need to focus on product innovation, pricing, packaging, distribution, and marketing in order to succeed.
The focus of CPG brand management is on creating a consistent and reliable product that consumers can trust. CPG brands often have lower profit margins than luxury brands, which means that cost control is critical to their success. CPG brand managers need to carefully balance the cost of producing their products with the price they charge consumers in order to maximize profits. Additionally, CPG brands need to be marketed in a way that appeals to a broad audience and drives sales volume.
What is luxury brand management?
Luxury brands, on the other hand, are products or services that are associated with high levels of quality, exclusivity, and status. Luxury brand management is all about creating a brand that conveys a sense of prestige and luxury to consumers. Luxury brand managers need to focus on product design, craftsmanship, exclusivity, and marketing in order to succeed.
The focus of luxury brand management is on creating a sense of exclusivity and rarity that appeals to a select group of consumers. Luxury brands often have higher profit margins than CPG brands, which means that their pricing strategy can be more flexible. Luxury brand managers can charge premium prices for their products, and they often use scarcity and limited availability to create a sense of exclusivity.
Luxury brands are also marketed in a way that is different from CPG brands. Instead of appealing to a broad audience, luxury brands target a niche market of high-net-worth individuals who are willing to pay a premium for quality and exclusivity. Luxury brand managers often use celebrity endorsements, event sponsorships, and other high-end marketing techniques to build brand awareness and create a sense of exclusivity.
Key differences between CPG brand management and luxury brand management:
Target market: CPG brands target a broad audience, while luxury brands target a niche market of high-net-worth individuals.
Product features: CPG brands focus on creating a reliable and consistent product, while luxury brands focus on exclusivity and rarity.
Pricing strategy: CPG brands typically have lower profit margins and need to balance the cost of production with the price they charge consumers, while luxury brands can charge premium prices and use scarcity to create a sense of exclusivity.
Marketing strategy: CPG brands are marketed in a way that appeals to a broad audience, while luxury brands use high-end marketing techniques to build brand awareness and create a sense of exclusivity.
In conclusion
While both CPG brand management and luxury brand management involve creating and maintaining a brand, the strategies used to achieve these goals can be very different. CPG brands focus on creating a consistent and reliable product that appeals to a broad audience, while luxury brands focus on exclusivity and rarity to appeal to a select group of high-net-worth consumers. Understanding these key differences is essential for developing effective brand management strategies in either context.
Can a business have a vision, an excellent customer experience and still be greedy? Perhaps! Is it acceptable? It depends on who you ask. This author does not condone it. One can earn an abundance of money without necessarily being greedy. We ought to be mindful of this: a vision is a statement that outlines the purpose, values, and aspirations of a business, it does not necessarily reflect the business’ ethical or moral principles. A business can have a vision for growth and success, yet also prioritize profit over the well-being of its customers and society.
Having an excellent customer experience can also be a tactic that a business uses to increase revenue and profit, without necessarily caring about the customers’ needs and satisfaction. A business can make efforts to improve the customer experience, but still prioritize its own financial gain over the customers’ well-being.
Being greedy means that a business prioritizes profit over other values, such as ethical behavior, social responsibility, and fairness. A business can be greedy and still have a vision, an excellent customer experience, and even be successful, however, it is important to note that greed can lead to unethical or illegal behavior, and can damage a company’s reputation and its relationship with customers, employees, and society in general.
It’s important for businesses to strike a balance between profitability and ethical behavior, and to consider the impact of their actions on all stakeholders, including customers, employees, suppliers, and the community.
There are brands that tout the virtues of their products and/or services with a religious fervor. A “cult” brand is a product or service with a strong loyal customer following, whereby their clients are fanatical about their products or services to the point where their lifestyle revolves around those popular brands. This level of fanaticism also makes those devout followers unsolicited brand ambassadors.
Cult brand examples with customer aficionados include Apple, BMW, Porsche, Fox News, Lulumemon, Zappos, Oprah, Harley Davidson and Starbucks to name a few. As for Starbucks, it offers a superior product and experience that some people would go out of their way, by driving by less expensive alternative coffee shops, to pay for Starbucks’s pricier cup of coffee.
More than just a product or service, it is a lifestyle
Generally speaking, brands that are designed for a lifestyle should have a much higher emotional value to consumers than ones based on features like cost or benefits alone.
Call it “hype” or give it any other label, cult brands are a unique breed that create and are given plenty of attention. Their brand value is also much higher than their closest competitors. They have achieved a special connection with consumers through their distinctive appeal.
Unlike religious or similar type cult following, the cult brand is considered “benign” or a “benign cult” since it satisfies a need and desire in a positive and harmless manner. Some brand loyalists have gone as far as having their beloved brand tattooed on their body.
A brand is considered as a “cult” brand if the following aspects are present:
Customers receive more than a product and/or service ─ they experience a lifestyle;
Brand devotees firmly believe there are no substitutes for their beloved brand;
Customers feel a sense of ownership with the brand;
Loyalty is prolonged over time compared to brands which are considered fads and unsustainable in the long-term;
An extraordinary degree of customer loyalty exists.
Ingredients of a cult brand: using psychology, identity and a sense of belonging
It is not enough for brands to spend plenty of money on glorified advertising. Any company with an adequate budget can do that. The essential challenge is to utilize an approach that makes people want to embrace a product and/or service that people would enjoy making it part of their life, as well as identity and belonging.
Brand cult status is an emotional component of the brand but it is not as simple to achieve. As per The Cult Branding Company, a brand consultancy firm, there are seven rules of cult brands this author stands behind ─ and are as follows:
Rule #1 – Differentiate: To achieve a special connection with consumers, the brand should have a distinctive allure and be unconventional in a good sense.
Rule #2 – Be Courageous: Cult Brands are successful because they are unlike their competitors. They possess their own personality, DNA and rules. They are also passionate about their offerings and their customers for whom they exist in the first place.
Rule #3 – Promote a Lifestyle: The goal of a lifestyle brand is to get people to relate to one another through a “concept brand.” These brands successfully sell an identity, image and status rather than merely a “product-service” in the traditional sense of the term.
Rule #4 – Listen to Your Customers: Focus on serving your customers’ desires by being customer-centric. Encourage feedback and utilize it as an opportunity to form ideas, and provide solutions that establish and retain loyalty.
Rule #5 – Support Customer Communities: Cult Brands build effective and sustainable relationships with their customers by developing and supporting a customer community that allows users, partners, and company employees to share information, answer questions, post problems, and discuss ideas about product enhancements and best practices in real-time. Cult brands also gather their loyalists by organizing occasional social events to ignite additional enthusiasm for the brand.
Rule #6 – Be Open, Inviting, and Inclusive: Cult Brands do not discriminate in terms of age, race, or sexual preference. As such, everyone who believes in the brand’s mission is welcome.
Rule #7 – Promote Personal Freedom: For most, the Abraham Maslow hierarchy of needs pyramid includes elements of self-esteem and self-actualization. As such, a well-regarded brand will express this as much by promoting freedom which is essential in expressing one’s own unique identity and worldview without fear of consequences.
In the end: Achieving the highest level of emotional connection via brand advocacy
Cult brands have a fanatical customer base. A culture is created around the brand based on consumers of a niche group. From there, the brand evangelists spread the message and enlist more followers.
When consumers are treated with honesty and delighted by a brand experience, they begin to bond emotionally with the brand. They become brand loyalists and advocates – buying the brand more often and recommending it to others. This behavior serves to build the brand’s reputation. This approach is priceless – even though it may take longer to take a positive effect.
That said, innovative products, exceptional services, the total customer experience and the lifestyle which comes with being associated with the brand are what truly makes a cult brand exceptional from competing brands. The key objective is to create a relationship of trust. The world’s powerful brands establish trust and friendship with their customers. They develop emotional capital, and gain passion. This is what makes them great, thus “cult” brands.
The Eastman Kodak Corporation was founded in the late 1880s. At its peak, by 1988, Kodak employed over 145,000 workers worldwide, and was a giant in the photography industry in the 1970s, dominating 90% of film sales and 85% of camera sales in the U.S., according to a 2005 case study for Harvard Business School. Sadly, it filed for bankruptcy in 2012. For almost a hundred years, Kodak was at the forefront of photography with dozens of innovations and inventions. However, the irony here is that the ignorance of new technology and not adapting to changing market needs initiated Kodak’s downfall. Kodak invested its funds in acquiring many small companies, depleting the money it could have used to promote the sales of digital cameras. Today, it employs approximately 4,500, and its main business segments are Print Systems, Enterprise Inkjet Systems, Micro 3D Printing & Packaging, Software & Solutions, and Consumer & Film.
Looking at Toyota Motor Corporation today, a company founded in 1937 and headquartered in Toyota City, Japan, Toyota and employing nearly 350,000 people globally, a similar story seems to be emerging here in regard to a future possible bankruptcy. Though, unlike Kodak, the Japanese government will probably throw at it a financial lifeline as it’s too important for its economy to allow the carmaker to fail.
The Marketing Myopia of Toyota
Toyota is one of the largest and most well-known brands in the world.The 2022 fiscal year which started in April, shows that Toyota has fallen behind its targets by more than 10%. In addition, profit slumped a worse-than-expected 42% in its first quarter as the Japanese automaker was squeezed between supply constraints and rising costs. It presently also holds the distinction as the global company with the biggest net debt on its books ─ $186 Billion and total liabilities also high at $269 Billion. Toyota has less than $83 Billion in assets. If its debt continues to grow in the next few years, a possible bankruptcy cannot be ruled out.
The main problem today is they can’t make enough cars. If you go to any Toyota dealership, they’re very low with an inventory of new cars. Their management of supply chain issues appears dysfunctional. However, their issue goes beyond that. They are stuck in a conundrum when it comes to the reality of the future of the electric car (EV). The Toyota leadership is in denial while the rest of the world moves on with EVs.
For Toyota, the hybrids were supposed to be the bridge to an electric future. Seems like they are stuck on the bridge and refuse to get off. Furthermore, Toyota has been pushing for hydrogen but neglected to put any effort into building infrastructure for it. In fact, they didn’t even try to lobby to have hydrogen stations built. Their hydrogen plan was really dead-on arrival from the get-go.
China and the Non-Legacy Car Manufacturers
The Chinese EV auto manufacturers such as BYD and Nio, along with the American EV manufacturer, Tesla, are doing to Toyota what it did to GM, Ford and Chrysler in the ‘70s. Toyota struggles with the EV shift and has continued to be highly critical of going all-in in battery-electric vehicles despite announcing its own plan last year to bring 30 battery EV models to market by 2030.
For now, the 2023 Toyota bZ4X is the lone representative of the company’s EV plans — an awkwardly named crossover that raises some questions about what the company really believes to be the future of battery-electric vehicles and just how committed they are to the entire thing. Though, the Toyota bZ4X stumbled out of the starting blocks, with the automaker recalling all of them due to an issue where the wheels could literally fall off the EV. The problem took several months to correct, with Toyota only announcing a fix and the restart of production earlier this month. During the recall, the company even offered to buy back affected vehicles from customers.
Foretelling the Future of Toyota’s EVs
According to a report by Reuters, Toyota has formed a working group to come up with ways to improve its EV strategy. The group reportedly has a deadline of early next year to decide whether to improve its existing EV platform known as e-TNGA, or suggest an entirely new EV architecture, four sources with knowledge of the discussions told Reuters.
Alternatively, Toyota may just rebadge and import Chinese EVs or license another automaker’s EV platform, such as VW’s MEB platform, though outsourced automakers and other 3rd party suppliers can drain Toyota’s margins, leaving Toyota very little funds to invest in developing their own EV platforms.
In the End
Kodak was the very first company whose engineers came up with a digital camera, in 1975. Although the company had an early insight into digital, it lacked the commitment and management support for a huge production shift. Moreover, the business of films and paper was very profitable at that time and those items would no longer be required for photography. As a result, Kodak would be subjected to huge losses and end up shutting down the factories which manufactured those items. Kodak finally went to market with its initial digital camera model (the DC40) in 1995 but was considered a latecomer in the category. Instead, in 1989, its competitor, Fujifilm, released the FUJIX DS-X, the first fully digital camera to be commercially released.
Another example of the industrial cycle. From tiny beginnings to rule the automotive world to self-destruction. From leading innovation to crippling indecision.
At least Kodak had many worthy patents to trade/sell. What about Toyota?
In strategic marketing “speak”, who earns more money? A general practitioner or a specialist physician such as an ophthalmologist? The latter has spent additional years studying with an emphasis on one particular area of practice which makes him or her both scarce and sought after in his or her profession. The same goes for an organization that has spent years studying the market with emphasis on doing one thing, but one thing extremely well. This automatically justifies higher fees translating to improved earnings. How does a saddle maker to the horse and carriage trade reposition itself to maximize its know-how in leather goods to now command $4,500 for a simple briefcase? Or even hawk silk scarves at $400? Think Hermes.
The answer lies in specialization, craftsmanship, and branding. As with all other specialized professions, a business that, chooses to concentrate on a particular market segment should simply be generating higher revenues. Alternatively, if you join the herd of the mainstream, there is always a vast consumer audience to tap. Profit is driven by volumes. It is harder to compete on price to the point of being perceived as offering a commodity with little or no differentiation — otherwise known as a “unique selling proposition” (USP). The only exception to that rule is when an enterprise keeps churning out innovative, “must-have” items ahead of its competition. Yet that requires constant creativity, refinements, and a considerable amount of R&D. Apple is an example of a brand that has managed to hit both objectives. Not bad for an enterprise, that started life in a garage.
Defining the term “Niche” Strategically, niche marketing is the way to go forward. However, you ought to be on top of the game. Recently, the firm Kusmi Tea has managed to put all the right elements together in an unbeatable combination. It personifies mass marketing and branding. If you have a specific group of people interested in “organic tea”, you have your proverbial niche. Whether promoting niche products, in focused markets, such as those for vegans, cruises exclusively for “cougars and cubs” or geared for ultra-high net worth individuals, the activities applied to attract that refined target undoubtedly calls for creative strategic thinking.
Targeted Audiences The best way to start is to define your target audience. An 18-year-old girl who wants to lose weight to fit into her dress is interested in weight loss diets. Hit her at her waistline, and the target is captured with simplicity.
The family who just purchased a puppy wants it trained and therefore requires the appropriate service. Show you can make a dog shake, rattle, and roll and still act well-behaved in the company of others and you will no longer need to flog dog whistles. Ever notice how a 50-year-old lady wants to hide her wrinkles and is always searching for a miracle formula to make her wrinkles disappear in minutes? Open Vogue and see how this “class act” can be achieved. These cited groups above represent finely honed targeted audiences. Marketing to such audiences and building an emotional bridge from the intention to purchase decision always attracts higher conversions. You don’t need to recreate the wheel. All you need to do is to find a suitable product that your target audience is looking for and present it on a silver platter. All target audiences liked to be addressed with intimacy and personal contact.
Driving the Niche Common sense tells you that driving a selected audience is efficient and lucrative. The following key index shows how niche marketing should be your chosen business strategy: 1. When entering a new niche market, generally you will not have much competition to deal with. This is justification alone for choosing a specific market in the first place. It also makes your SEO (Search Engine Optimization) Internet marketing strategy focused and cost-effective.
2. Niche markets appeal to target customers, and they are generally much more willing to spend money when their specific needs are met. This means that by catering to a specific target market, you can generally earn a better profit margin.
3. Some niche markets contain sub-groups of the main niche. For example, acai berry weight loss pills or natural weight loss diets are sub-niches from the weight loss niche. Despite their relatively small size, they are actually quite sought after. Identifying this need spares you from having to compete with similar businesses. People who fit this profile will seriously consider your product — especially if it offers them a genuine solution.
4. Niche marketing makes it possible to focus on becoming a true expert within a particular realm while building a reputable brand name. Strategically, it is also more focused and easier to segment and attack.
The “Ideal” Niche Player A niche market player is very effective at working closely with customers to build and maintain long-term relationships by innovating and challenging the existing norms in the industry, thus adding value to the project, program, and organizational level. If one is considered an expert in what one does by focusing on one area, then great success will follow. The value proposition must be relevant to the target market.
This means a target market must be clearly defined. Focusing on a specific market requires knowing it inside and out. This includes conducting a market analysis, stating a precise target market description and goal, as well as being clear about the type of relationship one would like to achieve with his/her market.
By definition, then, a business that focuses on a niche market is supplying a need for a product or service that is not being met by mainstream providers. As such, one can think of a niche market as a narrowly defined group of potential clients offering them the best of what you have. In return, their vendors will profit from higher margins and customer loyalty. As for targeting smaller “sub” niches, you will find them much easier to dominate.
Recently, I followed a Linkedin luxury sector group thread. Discussion centered on the appropriate manner clients should be treated by sales personnel in a luxury retail shop such as Gucci.
To my astonishment, one participant, posing as an expert stated that salespeople at such boutiques should be snooty. The reason given was that this attitude was part of the luxury cachet.
How ludicrous and puerile, I thought.
In my experience, this is precisely what you should not do. Whether you spend $10,000 or more on a Rolex or $20,000 or more at Hermes all clients should be treated with respect. Period. Aspiration and negative attitude sales pitches are not only counterproductive, but they are also destructive. (I might add, that this should be true of all human interaction and not just the act of buying luxury products.)
Does Luxury Really Have Meaning?
Luxury was never about price. This is an outdated concept built on a social model which is incompatible with democratic values. It is about brands, which are authentic. Authenticity implies function, design, intrinsic value, and in certain cases heritage and pedigree.
Luxury must provide the right experience.
Sophisticated customers want the wow factor.
This means touching the heart and dazzling the senses. When done in this manner, the client feels their lifestyle enhanced. Yes, I know, like you do that a product is just a thing. However, things act as a trigger and can alter perception, inner balance, and outer harmony.
Look at the keys to luxury brand management and you will recognize the essentials in selling aspiration:
1) Self-expression and sense of self 2) Exceptional treatment and experience when in the act of purchase 3) Craftsmanship=Quality 4) Authenticity 5) The Rarity Factor 6) Emotional Bonding 7) Mystique
To achieve these elements the brand must be expert storytellers. One of the grand storytelling kings, Ralph Lauren, understands this like the lines on his hand.
Exceeding Expectations
Luxury goods are not sold the same way as mainstream products. It’s not enough to simply introduce and sell a luxury brand surrounded by a fancy store with design-inspired display cases either. Consumers of luxury brands tend to have higher expectations than that of traditional consumers. They are discerning and sensitive to questionable tactics, as well as intolerant when comes to aggressive salespeople.
The attitude, product knowledge, and overall delivery/presentation of the product by the sales consultant/brand ambassador all play an equally important role. This translates to a well-educated, skilled staff having good communication skills, a high level of presentation skills, and a customer-centric approach.
A study by The Luxury Institute, in New York, finds that Burberry and Bottega Veneta excel far better in CRM (Customer Relationship Management) than other companies. Their key findings were under the title:
“Leading Edge Insights Into The World Of The Wealthy”
Sales associates should be employed from related luxury brands and products, with consideration given to those in the service sector such as hospitality or premium airlines: Singapore Airlines, Swiss Airlines, Emirates, and others — or perhaps from premium apparel brands and high-end cosmetic brands. One thing is certain: Training ought to be based on specific brand requirements.
As more luxury brands open their own retail outlets to stand apart, they need to better control sales channels, image, and front-line personnel.
One cannot stress enough for Sales teams to have the right training. For new sales hires not familiar with selling luxury brands, a company has to invest to train them and ensure occasional retraining including recap courses. Luxury sales training should include: – In-depth product knowledge – specifically how it will help satisfy the customer’s needs; – Focus on the customer – who they are, what they like/dislike, determine needs, motivations and preferences; – Exceed customer expectations by delighting and surprising; – Appeal to client emotions; – Never put down the competition.
Ultimately, craftsmanship, design innovation, exclusivity, and pedigree sell themselves. Correct sales attitudes should personify the luxury branded products and it becomes in the client’s eyes a done deal.
Selling, or Rather, Storytelling with Product Knowledge and Finesse
Consumers today are sophisticated when it comes to shopping – thanks primarily to the internet where information on just about any product can be researched and used for comparison purposes. Consequently, when a prospective client walks into a store, he/she is armed with knowledge – which is why the sales professional should be product proficient and adept at assisting and guiding the client to the purchase by making use of flattery, romance, and showmanship. Charisma is an asset.
To illustrate, if a sales consultant, wearing a pristine white pair of gloves is presenting, for instance, a Chopard watch, he/she will utilize terms with finesse and avoid using language which discusses a specific price tag. In its place, the word “value” can be used. Instead of calling the product an obvious “watch”, the sales consultant can say, “timepiece”, “masterpiece” or simply pronounce the model name. It should then be demonstrated in a dazzling manner emphasizing its innate qualities and timeless design with functionality – amongst other features that focus on one’s sentiments.
When selling a niche automobile such as a Porsche, the sales professional can talk about racetracks, describe road-holding capabilities, and build up a fascinating story – after which time he/she can bring up reliability and the technical details which confirm to the discerning client what he/she is already aware of.
Hiring Selection Process: Who Should Make the Cut?
When seeking to hire sales consultants, there should be a set of criteria established to ensure a successful performance. The people selected for the end-user contact should have the following characteristics:
1) Retail sales experience in a luxury environment;
2) Empathetic: expertise in establishing customer relationships that translate into sales;
3) Image: proper attire and fashion accessories, verbal communication, and grooming. Clients should see the brand made manifest so it has a personal connection;
4) Skilled at the emotional aspects of a sale: bond with customers so that relationship leverage is genuine;
5) Passionate and Professional mindset;
6) Highly collaborative: knows how to work with and through others in a team-based environment;
7) Entrepreneurial, competitive, self-confident, and self-motivated.
Discounted Luxury is an Oxymoron
Under no circumstances should luxury brands be discounted. They need to stick to their true sense of meaning and heritage. By cutting prices, brands risk changing the quality-price relationship in the customer’s mind. This practice normally stems from sales consultants, who may not be convinced that the particular luxury goods offered for sale actually merit the price.
Such an attitude can be tricky to navigate effectively. Customers need to believe otherwise they question and the product is devalued in their eyes. Salespeople, who are not up to this aspect of brand personification should not be hired.
Price discounts should be a tactic of last resort.
A robust alternative is to offer gift items or bonuses such as complimentary tickets to Art exhibitions, gift certificates, or access to a coveted local restaurant.
Employ Mystery Shoppers
In the retail brand experience, nothing should be taken for granted. In a progressive customer-driven entity, training and developing human assets should be an ongoing process. Moreover, brands should be an enemy of the status quo.
Hiring mystery shoppers to gauge the total sales cycle approach and report back their experience to management should not be ignored.
Another suggestion is for the luxury boutique owners to hire a third party such as a consultancy firm, which specializes in the high-end retail domain, to shadow the sales consultants and evaluate their performance.
Both techniques need to be conducted with frequency. How can you understand what the client expects by acting and gauging behavior in the field? You can’t.
The Final Take
Remember, a luxury sales professional does not pressure customers to buy.
He/She plays the role of a luxury purveyor and advisor – someone who is an expert product consultant and keeps a client’s best interests at heart. By demonstrating value, a sales consultant establishes himself/herself as a professional.
It’s about establishing a person-to-person relationship as opposed to a salesperson-to-customer relationship.
In today’s economy, service has become a core competitive advantage. Hiring the right people and training them to sell properly, increase sales and retain the brand’s luster should all be part of its ongoing ambitions.
Sophisticated customers want products that dazzle their senses, touch their hearts and stimulate their minds – which they can relate to and can incorporate into their lifestyles. The degree to which a luxury product is able to deliver a desirable customer experience is vital.
According to the Oxford dictionary, the noun “complacency” is defined as “A feeling of smug or uncritical satisfaction with oneself or one’s achievements.” It happens in some people’s lives, as well as in organizations, whether for profit or not. In the former case, complacency in one’s personal life includes fear of failure, remaining in the comfort zone, and being concerned about what others think. These can inhibit our potential, happiness, relationships, and fulfillment. In business, complacency includes low overall performance expectations, insufficient performance feedback along with unclear operational objectives for each employee, disengagement, lack of passion, and lack of investment in the operation and/or others. In both cases, uncritically satisfied with oneself or one’s achievements, smug, and apathetic with regard to an apparent need or problem.
Status Quo: The Silent Disease
Complacency is the quiet business killer that strikes without notice and has the power to destroy even the most successful businesses. The problem with many businesses, regardless of the sector they are in, is they are content with the status quo. A status quo bias minimizes the risks associated with change, but it also causes people to miss out on potential benefits that might even outweigh the risks. Consider the flawed proverb, “If it ain’t broken, don’t fix it.” It denotes to leave something alone and refrain from correcting or improving what is already working because any attempt of improvement may be risky and backfire. It has been used in the context of everything from social reform to business operations, as well as for personal mottoes. For many, it is an ingrained rule ─ a tendency to be lazy.
However, by rewording it slightly we can in-turn rephrase it as, “Just because something isn’t broken, doesn’t mean it can’t be improved.” Now, this! The automobiles we produce are excellent but we can make them even better, more technologically advanced, and more fuel efficient. My bed is not broken but that doesn’t mean I can’t find one that’s more comfortable. The educational system is not broken does not imply that it cannot be improved.
Continuous Improvements are Key to Sustainable Success
Continuous improvement is the continual process of making incremental and meaningful changes to products, services, or processes. It’s what keeps a business on the leading edge, retain customer loyalty and remains competitive. In Japan, a popular word used in many organizations and spread in many other industrial countries is “Kaizen.” It is a compound of two Japanese words that together translate as “good change” or “improvement.” However, Kaizen has come to mean “continuous improvement” through its association with lean methodology and principles. The five elements of the Kaizen approach are:
teamwork,
personal discipline,
improved morale,
quality circles,
suggestions for improvement.
Even when an organization is enjoying success, it should always be ready for the worst-case scenario of a disruption.
Actions are Either Proactive or Reactive
Sooner or later, most companies fall into adopting a reactive approach out of laziness, complacency, or the assumption that it cuts costs. It stems from the old-school mentality of “If it’s not broken, why fix it?”
When there is a culture of complacency, new initiatives struggle to get traction, the competition is not actively monitored, and market shifts are not looked at for potential new strategies. Without initiative and drive, resistance to change will only grow over time. Any form of business should be flexible and adapt to new techniques and technologies. It ought to endeavor to be proactive rather than reactive. The offense is critically important to success in business. Having goals and taking steps to reach them is what leads to business growth and, in many cases, the survival of the business. Business leaders must understand how to protect their operations not only in the short run but in the long run. Being proactive can prevent imprudent mistakes from ruining your business. Unfortunately, most business owners tend to think of fixing the problem which strikes without warning as a reactive thought process. Changing your thinking from reactive to proactive will take the burden of stress and make you better prepared for the inevitable.
Avoiding Business Complacency
Here are some recommendations to keep you and your organization from being complacent.
Practice Urgency Every Day: Begin the day looking for something to fix or improve. Nothing is perfect and neither will anything remain static.
Find Opportunity in a Crisis: Eventually, a true crisis will come. However, once a crisis is in motion, turning it into an opportunity often requires new ways of thinking and responding.
Correct Bad Habits: Sometimes employees do not recognize that they have developed a bad habit. In order to spot and address these poor behaviours, managers and coworkers should observe and mentor other employees.
Talk About Change: When an individual is complacent, he or she will have a difficult time recognizing when change has occurred. It is important to talk about change often in an attempt to engage the mind.
Change the Routine: Rotate employees’ job tasks so they are not performing the exact same function day-to-day. This will help keep the employee thinking about what they are doing and prevent the slide into complacency.
Encourage Employees to Build Value: Once employees have mastered their jobs, find ways they can bring more value to the company and their job. This keeps the employee engaged and thinking about what they are doing and how they can do it better.
Recognize and reward strong performance: Competent employees will become more engaged if they feel valued for the work they are doing.
Encourage open, honest communication: Provide employees with an efficient means of communicating with each other and with management. Foster a culture that allows for questions and differing points of view. Involve employees in discussions surrounding organizational changes.
When branding comes to mind, we think of products and services. We also come to think of “personal” branding ─ especially in professions such as attorneys, architects, accountants, and the like. Moreover, with the prevalence of freelancing, as well as influencers, branding offers them similar benefits in regard to grooming their image and reputation to attract more clients and fans respectively. However, cities, towns, and even countries have joined the bandwagon and business concept in branding themselves. They do so because they understand the many benefits of branding nations. These include attracting trade, business investment, possibly immigration, and/or tourism. For a few, it may be reputation management due to a negative perception/disrepute of the location.
Nation Branding refers to a process in which a country claims a distinct brand positioning in the minds of its citizens, the global prospect/customer, and international stakeholders. This requires the country to invest resources in coordinating and integrating a multitude of activities.
In many cases, the country image provides credibility to the brand image. Think French wine, Swiss watches, German Cars, Danish designs, and Greek hospitality. Additional examples as consumers top of mind are Italian fashion, Colombian coffee beans, and 100% pure New Zealand wool, and are some of the well-known examples.
Through effective nation branding, countries, and cities independently, can develop a distinct personality that benefits both the country and its renowned national brands within it. Tourism and national airlines may be the main representation between nation branding and corporate branding. However, there are various other sectors that can also partake an important role in nation brand building.
Countries are turning to PR to revive their global reputations A Public Relations (PR) agency can bring value and enhance a nation’s reputation. They are storytellers who create narratives to advance their agenda. Additionally, PR can be used to protect and build reputations through various online and offline media sources, as well as self-produced communications.
When Kuwait was invaded by Iraq, the former hired Hill & Knowlton. The agency was tasked with creating international sympathy along with Western military support for what was essentially an oil-rich undemocratic regime in the Middle East. This worked in its favour.
Where paid media, such as advertising by a country, is normally the default way to promote anything that may be construed as propaganda, earned media, which is what PR is considered, offers to help boost brand awareness, increase credibility and expand reach. Earning media on trusted outlets and news publications not only validates the content created but gives a brand for a nation third-party credibility. PR comprises any publicity or media that is not generated by the country (or city) or any of its agents, but rather by a third party ─ an agency along with organic methods via the targeted audiences, social media fans, journalists, and/or bloggers.
Corporate branding leveraging nation branding Inherent connections exist between a nation’s brand and the corporate brands that operate within. Both rely on each other, thus leveraging each other’s fortes to build and further their reputation. One corporate sector that typically has close ties to a nation’s brand creation is the airline industry. For example, national carrier airlines such as Emirates in Dubai, Singapore Airlines in the island country of Singapore, and Turkish Airlines in Turkey, have been highly successful in leveraging their respective countries’ image, culture, and values in order to market their services, as well as act as nation brand representatives globally. The experience for visitors begins with the inflight experience.
The task of building soft power, along with a positive image of their nation, is one that policymakers throughout the world are becoming ever more concerned with. The soft power strategy has become popular in Turkish foreign policy. Turkish Airlines, a well-known international airline brand, has evolved into a tool for Turkish soft power because of this appeal and the momentum Turkish public institutions gave Turkey in its pursuit of soft power.
Case Study: Repositioning Greece In today’s globalized world where national identity loses a step, a country willing to compete must have a brand. This brand should communicate to the world audience Greece’s characteristic values that make up her essence. The louder and clearer this message is broadcasted, the better Greece will emerge among the nations.
Greece is, in fact, easily recognizable globally, as a country mainly for its beautiful landscapes (especially its numerous islands), its history, food, hospitality, and some are even aware that besides tourism and agriculture industry respectively, the country is also known for its powerful merchant shipping domain. Greek shipowners control one-third of the world fleet. However, the fact that Greece enjoys a powerful image overseas does not necessarily mean that the country has a brand, at least not in a brand in the modern meaning of the word. Other countries have successfully built their own brands, but Greece has not, or at least not well enough, other than its Greek Tourism Organization with its annual tourism advertising campaigns (with a different theme and slogan every year).
Greece’s competitive positioning should be entrenched in both the leisure destination as well as an environment full of opportunities inspired by its residents’ lifestyle, boosting the business environment and merging the country as an attractive investment destination. The aim should be to create a country recognized worldwide (especially in the nontraditional international markets) for its unique lifestyle, talented people, innovation, and entrepreneurial culture but certainly without losing its destination branding features within the tourism and hospitality markets. Moreover, Greece can take advantage of its rich culture (philosophy, language, athletics, etc.) to improve its international image and cultivate cooperative relations even with countries that have no direct interests.
Greece should be able to gain competitive advantages over other nations. Being considerate of the nation’s image at home and abroad is paramount for this to transpire. Promoting a specific brand would definitely help.
In the end Evidently, positioning or repositioning a destination is not an easy task. Effective promotional campaigns and shrewd diplomacy can be utilized as a means to achieve strategic objectives. In doing so, a country or city/town, like a product or service enterprise, should think analytically, target specific audiences, create a unique value proposition, and aim to establish a global brand that resonates. This requires conceptualizing nation branding as a form of national soft power.
Futurebrand publishes the Country Brand Index every year, which includes an overall ranking of the 75 countries and rankings by dimension, FutureBrand collected quantitative and qualitative data from Approximately 2,500 opinion-formers and frequent international business or leisure travelers in 17 countries (USA, Canada, Brazil, Argentina, UK, Germany, France, Russia, Turkey, South Africa, UAE, India, China, Thailand, Japan, Mexico, and Australia). complete perception dashboards for the top five country brands, regional leaders, and ‘ones to watch’ for the future. Futurebrand tests a global research sample based on the Hierarchical Decision Model (HDM) which involves determining an individual’s awareness, familiarity, association, and preference toward a country’s brand. In their 2018-19 ranking, the top 5 nations’ brands were (ranked from first to fifth) Germany, Switzerland, Japan, Sweden, and Canada. (Source: Wikipedia) ____________________________________________
Regardless of which direction the economy is moving towards ─ whether a recession, another pandemic, a calamity, or other external force, as an aspiring entrepreneur, launching a resilient type of business is key. As such, starting a profitable evergreen business idea could be the best bet for long-term survival.
Recession-Proof vs. Recession Resistant
Recession-proof businesses are traditionally defined as those that either thrive during adverse economic times or at least survive intact, whereas, recession-resistant businesses, are those with a better chance than most of riding out a recession.
Top 14 Profitable Evergreen Businesses to Consider
1] Noncyclical Businesses
These include consumer staples that are less reliant on business cycle shifts. Such companies produce or distribute goods and services we always need. Financially, they’re relatively stable and independent of the fluctuations in economic activity. For example, we won’t stop buying groceries because the economy is in a whirlwind. Then there are some which are not very sexy such as funeral homes/services.
2] Food Stores and Food Service
This includes take-out prepared meals and delivery. Regardless of the economy, everyone needs to eat. Specialty food shops such as gourmet, ethnic, and health-related are also ever more popular due to changing tastes and nutritional concerns respectively.
3] Health Care Providers & Products
As with food, health care is crucial as people continue to get sick even during bad economic times. Businesses include clinics, home care, and the pharmaceutical domain.
4] Discount Retail
Dollar stores and retailers selling liquidated items fall under this category. People cut back on luxuries during a recession but that doesn’t mean they never buy anything that isn’t strictly necessary. People who otherwise never step into a dollar store rethink their shopping habits when a recession hits. In categories that aren’t emotionally important, consumers ‘trade down’ or become bargain hunters. For instance, a passionate Porsche driver will shop at Costco every weekend.
5] Information Technology (IT) & Cybersecurity
There is no escaping it! Technology now permeates every sector of the economy, every company is now a “tech” company. Every business requires systems administrators, software designers, and cybersecurity specialists, so the demand for such independent contractors, workers, and services is higher than ever ─ despite the state of the economy. In addition, the International Data Corporation (IDC) forecasts that worldwide cyber security spending will reach $174.7 billion in 2024, with security services the largest and fastest-growing market segment. The rise in cyber attacks, especially ransomware, has fuelled the cyber insurance market.
6] Education Sector
While some areas of the education sector, such as schools, have been growing at 4-5 percent a year, others like multimedia content, pre-schools, and vocational training have been growing much faster at 20-30 percent. Overall, the education sector is estimated to be a $40 billion market projected to grow at a compounded annual growth rate of about 16 percent for the next five years. Studies show that students are more like to enroll in college and even more likely to stay in college during a recession [source: Parker]. That was true during the Great Recession and every U.S. recession since the 1960s, making higher education one of the more recession-resistant sectors around.
7] Transportation, Logistics & Shipping
Transportation and logistics are a critical aspect of development for any country as it ensures the delivery of goods from one place to another. This gives rise to many lucrative transportation business opportunities that one can thrive upon and earn good profits. Businesses that thrive in a recession happen to have products or services that people need regardless of their circumstances. Both freight and logistics deliver the necessities, making it consistently a recession-proof and profitable evergreen business.
8] Electric Vehicle (EV) Repairs & Maintenance
There’s an opportunity for entrepreneurs in the electric vehicle market. Electric vehicles are sweeping the auto industry, and one crucial piece has largely been left out of the limelight ─ service. Tesla, the largest electric car maker, has famously struggled with servicing its growing fleet, and with demand for battery-electric cars skyrocketing, it may not be alone as many more start-up EV makers, such as Lucid and Rivian, along with legacy car makers, are churning-out more models. At some point, when their warranties expire, independent EV repair shops will be the go-to for diagnosis and repairs.
9] Various Trades in Constant Demand
If it requires vocational education or a trade college diploma, trades include Electrician, Plumber, General Installer (Handyman), Carpenter & Bookkeeping to name a few in high-demand occupations which can be turned into very profitable self-employed businesses.
10] Consulting and Brokerage
This includes a Procurement Broker, an Insurance Broker, Mortgage Broker, and a Rental Agent among others. Brokers manage various business deals and act as a liaison between parties, as well as create and maintain relationships, administer sales, and perform administrative tasks. They don’t need to own any physical products for resale (inventory) and can earn handsome commissions or success fees when closing deals ─ the lucrative types in particular such as a large project.
11] Pet Sector
People love their pets. If a beloved dog or cat falls ill, its owners are not likely to get frugal and skip on veterinary care. There is also pet insurance which is getting ever popular. Then there are numerous food choices, accessories, and clothing. Grooming and other pet care services are also part of the spending. According to the American Pet Products Association, in 2021, pet owners spent $123.6 billion on their pets in the U.S. and according to the 2021-2022 APPA National Pet Owners Survey, 70% of U.S. households own a pet, which equates to 90.5 million homes.
12] Property Management & Real Estate Development
In this category, reference is notably made to residential property management such as for condominium buildings (common area & exterior maintenance) and management. Real Estate development would be owning housing for rent via Airbnb and other such online residential rental platforms.
13] Daycare Center
The trend of working mothers has been increasing over the years. Therefore, there is a need for someone to take care of their kids. Day-care centers can solve this matter. If one can provide good and hygienic facilities, along with a structured educational program and activities, this can attract a good chunk of business (i.e., kids).
14] Organic-Urban Farming
These days, many are preferring organic food which is free of pesticides and chemicals. If you can take some piece of land, or build a reasonable size greenhouse, you can do organic farming (both organic vegetables and fruits) and supply to retail outlets, and high-end restaurants in towns and cities. Moreover, children are more susceptible than adults to diseases caused by chemical pesticide residues in food and so parents prefer to give them organic foods. Food producers experience many advantages in organic farming that conventional growers don’t. For example, organic farming doesn’t typically require the same high capital investments than conventional farming does. Especially when the expense of chemical fertilizers, pesticides, and genetically modified seed stock is factored in.
In Closing
Many of the evergreen businesses, stated above, do well during recessions by providing goods and services which increase in demand due to recession conditions. In addition, the ones which sell physical products offer less expensive alternatives to premium purchases since demand is relatively inflexible to changes in incomes.
For the last couple of years, I and several other people I know have been complaining about what it takes to reach out to a contractor for home renovations and landscaping. The idea of getting frustrated trying to obtain a quote or to initiate the work agreed upon is ludicrous. After all, shouldn’t a business be eager to get new business and build, as well as retain its reputation? Then there are contractors who do shoddy work, leave a big mess behind, and/or constantly delay completing the work.
While contractors are skilled, it does not necessarily make them great businessmen. As independent tradesmen, they evidently have not received much, if any, education on entrepreneurship including communications, sales, marketing, and customer service/customer experience. What they do practice is being all over the place with several simultaneous jobs, with no focus in sight, coupled with the present scarcity of skilled tradespeople to fulfill the work demand. They are a special breed of businesspeople. “Half upfront and I will get back to you.” Is their typical modus operandi.
What Gives?
Many wannabe entrepreneurs (in this case ─ independent contractors) have too much on their plate while they lack adequate coordinating and communication skills. They are buying, selling, ordering, coordinating workers, suppliers, tools ─ and if they have a family, this also requires their attention. You get the idea. Furthermore, add to the equation the work truck which may have broken down. If your job is of less value than somebody else’s, you may be placed on the back burner or your request for a bid can be completely ignored while they work toward collecting money from another project. Sometimes obtaining parts specific to a job can be difficult to obtain due to the challenging supply chain. This causes long delays in receiving the necessary supplies. While waiting, the contractor, who needs to continue earning his income, goes elsewhere to work but will return to finish up a job once the item is in. “Juggling” and “prioritizing” is their default work ethic. That said, the customer is at their mercy.
Solutions to Reforming Their Business Conduct
The following are things contractors do that customers despise and how those missteps can be avoided.
Failing to Communicate
There is nothing worse than having a contractor with whom you can’t communicate or who does not respond to your messages in a timely manner. It lacks courtesy. Not only can this affect customer relations issues, but also impact the entire construction team working on the project.
Solution: Be accessible and responsive to potential and existing customers. This is one of the best ways to gain their trust and build your reputation. Either obtain assistance from a family member, or better yet, hire someone to handle all communications.
Subcontracting
When a contractor delegates his work to someone else, the homeowner has directly no control of this. The customer has made plans with the initial contractor and the subcontractor may not have all the details and turn out to underperform.
Solution: A contractor should vet the subcontractor diligently and be on the same page in terms of the work specifications required to be completed along with a follow-up inspection.
Producing Low-Quality Work
Lack of communication and subcontracting can both attribute to low-quality work. If customers paid for a specific service and it was executed poorly, in their right, they expect to have it redone ─ and not have to pay for it again.
Solution: Contractors should only work with trusted and highly rated contractors, avoiding the cost and trouble of low-quality work.
Extending the Timeline
Before work on a project begins, an estimated completion date is usually given so the customer will know how long the job will take with the ability to plan appropriately. Disappointingly and often, a contractor will extend this time period not once but maybe even twice. It may be deemed acceptable if the weather has been worse than anticipated (such as a lengthy harsh winter), or there has been an unforeseen predicament. Oftentimes though, that isn’t the case. Usually, it’s a lack of being organized, issues with subcontractors and/or supplies, project challenges not envisaged during the onset, or undertaking too many jobs simultaneously.
Solution: Contractors should be well aware of the above outcomes and do a better job planning for the conceivable.
Lacking Cleanliness
Often, you will hear about how contractors and their crews leave behind a giant mess after they are done with their project. Homeowners should not have to pick up after the contractor’s workers, who can leave behind hazardous items, such as nails and broken glass to name a few.
Solution: Once the work has been completed, contractors ought to make certain they don’t leave their mess behind. A job well delivered is deemed professional and will lead to customer satisfaction along with referrals and a stellar image ─ priceless!
Unexpectedly Adding Fees
When all is said and done, customers get appalled soon as they discover that they are paying more than was initially established. There are times when these contractors won’t even have a reason for the price increase.
Solution: The work estimate should be worked on very carefully considering the worst-case scenario rather than spitballing. Customers don’t care about your issues and underestimates. They want an all-inclusive and solid quote ─ in effect for at least three months).
Safety Negligent
Homeowners don’t appreciate when a contractor doesn’t ensure that his crew is following proper safety protocol. Not only are the workers subject to being injured, but the homeowner and his/her family coming and going from the house could also get harmed.
Solution: Safety should be a priority and contractors should maintain high standards including the safest, most up-to-date practices and procedures. They should be a member of a construction/renovation trade association.
Dividing Work & Attention
Contractors tend to be busy with multiple clients at once, thus their phones are always ringing. However, customers obviously hate it when contractors behave as if another customer and job seem more important than theirs.
Solution: Contractors should place their complete and total focus on the job at hand, as well as be honest about their workload. Once again, communication is key.
Bottom Line
It seems that the self-taught business ethos of independent contractors is: If they don’t need work right now or in the next few days, they don’t feel obligated to respond. From the consumer point of view, it’s definitely bad business. An MBA is not necessary to arrive at this conclusion. A small contractor has to wear different hats, but this person is usually only qualified to wear one of those hats. Here is how they get into this mess. Take on more jobs than can mentally and physically be handled/juggled at one time. Every customer wants it done now. “When can you start” or better yet, “When can you finish?”
The solution is to hire a full-time salesperson to price and provide service. Perhaps even hire a person to schedule work. In other words, separate jobs. However, the problem is that this may not be affordable for the contractor starting off. If applicable, a trusted member of the family, such as the spouse can be considered the best person to answer phones and undertake the scheduling until the business can begin to afford hiring staff. It’s the only way the business can scale properly.
The contents of this article were presented from a customer point of view and business advisor, along with frequent observation tempered with the knowledge of how many other businesses operate.
How often do you come across a company, either as a consumer or at a business relationship level, and realize how frustrating it is to deal with?
To understand and penetrate the corporate governing structure and “culture”, you need to look no further than the upper echelon of the hierarchical tree. It is here that procedural decisions are shaped and executed. An entity’s leadership is expected to head the enterprise by governing its long-term growth and sustained wealth.
Moreover, there is a constant search for the “right” human resources. Recruited and fresh talent must resemble the leadership in tone and style. Call it the organization’s DNA. Exceptional organizations are good at these types of corporate strategies, thus strengthening performance effectively.
We notice that in certain types of B2B transactions, there can be scope for unscrupulous behavior. One or both parties are tempted by “disservice” during their business exchange. Shortsightedness might lend itself to making this underhanded approach appear “profitable” on paper. Such relationships inevitably end badly because they are not conceived with trust or respect.
Success Breeds Success
Companies that foster the right attitudes and strategies put themselves on track for success. Examining their corporate histories, you can witness a trajectory of growth. They have a tendency to dominate their markets and “win” through competent talent, innovation, and an entrepreneurial mindset within the leadership at the executive level. These choices underscore the prosperity and rapid growth of the institution. An examination of Alphabet (Google) or (Meta) Facebook shows this quite nicely. They are not built like “traditional” corporations nor do they act like them.
Organizational leadership is accountable for creating value for customers, employees, and its owners/investors. When Bill Gates conceived Microsoft, he put the firm on track for providing constituent audiences with what nobody else could provide. Understanding “asset” management in an expanded meaning of the term guaranteed that Microsoft would succeed under, co-founder, Gates’s stewardship.
The opposite is equally true. When top executives lack knowledge or experience for board positions, they should not be promoted to these leadership roles. Some family-owned businesses run afoul here and this brings up the issues of sustainability and corporate governance. Another weakness in running an organization, in my view, is pushing for short-term profitability at the expense of solid planning. For example, in large organizations, competence is not the primary value but rather connections, politics, and clever tactics. Such “benefits” can usually compensate for incompetence.
No business can continue to prosper unless it attracts fresh and eager talent. Despite the dilemmas within the financial world, top organizations consistently lure new talent with lucrative compensation packages. It is easier for a firm such as Goldman to tap the “best” because of its reputation, size, and success than a small local financial player. When Goldman recruits they know where to look, whether it is Harvard or the London Business School. Prospects will already contain the seeds of the corporate culture in their past. Given the “right” conditions, new talent blossoms. Qualifications are never enough. They are a starting point reinforced by attitude and values. The selection and screening process is designed by HR to weed out inappropriate candidates.
Established software companies’ interview process includes quizzing candidates with challenging technical questions. This practice not only assesses problem-solving and knowledgeability but also explores the ability to perform under pressure, which is a key skill required for software engineers to succeed in their intense work environment.
One thing is firmly certain ─ the best-managed companies have “one” factor in common: They are constant achievers in their respective industries. These companies exude managerial excellence. Financial performance is the result of this style of management. Consider companies such as Microsoft, Amazon, and Apple, among others, which thrive and ranked in 2021 by the Drucker Institute Company Ranking, as America’s largest publicly traded companies according to Peter Drucker’s principles of effectiveness—“doing the right things well.”
Deeds Not Slogans
Companies with inept leadership usually fail in the first year or two, but even established companies can stumble badly when they outgrow the capabilities of the founding team. Research by the U.S. Bureau of Labor Statistics demonstrates that nearly 6/10 businesses shut down within the first 4 years of operation.
To be a successful entrepreneur is not an effortless task. It takes plenty of sacrifices. A new generation of young entrepreneurs thinks the road is smooth and a fast track to easy wealth. Not everyone will become Jeff Bezos. Obstacles and sacrifice are part of the deal. Harnessing opportunities and overcoming challenges daily to top the competition is constant work. These conditions are true no matter what the sector of a business engagement or company size.
Telltale signs of weak organizations can be traced to inept leadership. The following points highlight the deficiencies: • Poor customer service – slow or no customer inquiry replies – abysmal handling of sales and service complaints. Service is portrayed as a reward, not a right or benefit. • No Unique Selling/Value Proposition – Companies need to define and articulate their unique value proposition and deliver on it consistently. Create a platform for sustainable and competitive advantage. • Operational deficiencies – various ailments and no structure • Absence of or very little communication among staff and management – Divisions aren’t well-coordinated and do not function as a team. • No transparency – There is hardly any openness from management. • Unethical practices – short-term selfish objectives in search of market share. Top executives should promote social norms and principles as moral agents. • Lack of proper execution of decisions and new products/services. • Productivity incentives should be implemented to boost results and employee morale. People must be given a reason to work hard and be efficient. • Creativity is practically non-existent – An absence of innovation and employee empowerment will hurt progress and stifle new ideas. • No clear vision/strategy – there needs to be a strategic vision that reflects a truly unmet need and has the commitment of a dedicated CEO. That means that there is a well-defined target audience with a distinct value position that is differentiated, meaningful, and deliverable. • A weak sales force along with an unattractive compensation plan. • Favoring nepotism and bias – promoting family members over other qualified employees often leads to resentment or, worse, prompts valuable non-family employees to leave the company. • Poor hiring practices – should hire for attitude and train for skills. • Slow/delayed decision-making process – too many layers – overwhelming bureaucratic structure. • High turnover, which leads to poor employee morale, reduced intellectual capital, lower service levels, higher operational costs, and decreased productivity. • Management in a state of denial about their organization’s shortcomings – remaining with the dysfunctional status quo • No specific and/or stable channel strategy – Some companies focus on building a product but don’t think through how to get it into the hands of customers. Even if your product is great, unless you can sell directly, you may be dead in the water without strong channel partners. • The hidden game – corporate politics – power plays by a handful of individuals for their own benefit to the detriment of their colleagues and the company. • Misrepresentation of the brand(s) – too much hype – empty promises – not delivering on expectations – leads to dissatisfied clients who will alienate the brand. • Weak financial controls – cash flow dilemmas – over leveraged/undercapitalized (high debt-to-capital ratio) – not reinvesting a certain percentage of profits for future growth. • Absence of sound marketing program(s) and/or brand strategy – A brand is defined by how it behaves, from the products it builds to how it treats its customers, to the suppliers with whom it works. • Growing too fast and not staying on course as the company grows. • Lack or very little employee training & development. • Deficient in control systems – reactive rather than pro-active. • Lack of continuous improvements or complacent.
Top executives need to be accountable to the ownership or Board of Directors – whichever applies, or at least to an outside arm’s length and neutral party such as an adviser who can also play “devil’s advocate” when necessary.
Good Organizations Matter
The way to solve an organizational problem is to confront the structural issues with a moral sense of purpose and ethics. For its clients to receive stellar service, the firm must have its house in order. Besides structure and an efficient operation, employees should be trained and empowered to do their jobs efficiently.
Seth Godin, a renowned marketing strategist, stated succinctly: “If you want to build a caring organization, you need to fill it with caring people and then get out of their way. When your organization punishes people for caring, don’t be surprised when people stop caring. When you free your employees to act like people (as opposed to cogs in a profit-maximizing efficient machine) then the caring can’t help but happen.”
Companies that disrespect their employees and shut-out clients get willfully isolated and have a short life span through erosion of market share and significant loss of revenue. A company’s goal should place emphasis on serving its people properly and fairly. Higher morale generates higher profits – though occasionally other priorities hinder that objective, for example, self-serving behavior by certain executives.
Enterprises spanning a wide array of industries have earned distinction as “well-” or “best-” managed” by demonstrating business excellence through a meticulous and independent process that evaluates their management abilities and practices – by focusing on innovation, continuous training, brainstorming and caring for their employees’ well-being – as well as investing in meeting the needs of their clients.
In a nutshell: Well-run companies thrive no matter what by hiring the right people, taking good care of them, listening to customers, and never ceasing to innovate and improve.
In a Mad Men episode (Season 5, Episode 12: “Commissions and Fees”) actorDon Draper stated: “What is happiness? It’s the moment before you need more happiness.” Life should be a “do-it-yourself project.” Each level has its obstacles and perks, and you will be required to have a plan in order to navigate through it. With that said, the business of selling hope has been here since the bible. According to Marketdata, estimates are that the self-improvement market was worth $11.6 billion in 2019 ─ profiting off people’s problems. Not totally against this as it may actually help some individuals. However, most of the information provided is far from objective. The extravagant promotions (i.e., hype) utilized to stoke-up interest for the overrated and undervalued costly courses, as well as the 2-3 day “success concerts”, disguised as a business event with secrets to offer, along with all the hoopla on display, seem to be working for their intended target audience ─ mainly those with insecurities and inferiority complexes who believe they have been offered something of value and anticipate getting inspired. Needless to say, not everyone is a good fit for the schemes being sold.
Sadly, the euphoria, from success preaching concerts and sessions, wears off after several days, thus the attendees return to their pre-session selves. Evidently, you can’t be motivated by not being dedicated. Think of what was gained watching/listening to the “masterminds.” Possibly doses of motivation and common sense with a placebo effect.
Sold are also rehashed success “blueprint” programs where methods to become triumphant, on paper ─ in theory are scientifically unproven. Such recommendations are not blanket solutions to everyone’s challenges which one may be actually facing.
Then there are the coaching sessions which most of the time are not conducted by the extremely busy and prohibitively priced charismatic motivational “guru” himself or herself. Instead, the coaching task has been outsourced to a trained soldier who, despite his or her best effort and intention, does not possess the same persona compared to the one who had you sold on the overpriced sessions in the first place.
Master Salesmen at Manipulation & Emotions
There is a big difference between telling people what they like to hear and telling people what they need to hear. The new-age motivational gurus know exactly how to create a sense of urgency. Their charisma, voice inflection, observable passion, stage animation, audience engagement, and presentation skills are traits that create the buzz and draw crowds. They are most certainly very clever in marketing and packaging their personal image/brand. They put on a fancy light show accompanied by dramatic sound designed to evoke an emotional response in oneself creating the belief you are getting transformative change. There is no evidence to support the idea that those types of seminars have long-term positive changes in people attending them. People go to them because there is something about themselves that they want to change. There are other options and modes of therapy that are far less expensive that have been proven to be efficacious (think clinical psychology). What does it mean, for example, “to have a date with destiny”? Feel-good advice is a vague concept and an illusion. It does not solve anything or explain “how to” do something such as to overcome adversities in life or in a business.
Success trainers, income experts, and business coaches preach personal success systems. They supposedly know and share methods/strategies that will help you dream big and achieve your goals along with a substantial income. They do so by encouraging their audience to look at things from a different perspective and to become more attentive to their own talents and abilities. Yet most personal development coaches at motivational events often sell products including courses, books, and coaching. Apart from this, most built their success by selling rehashed advice.
The Use of Verbal Jujitsu
Straight talk and common sense only go so far. Apparently, sometimes it pays to overcomplicate a simple message by using simple terms into scientific or eloquent lingo as a good way to sell ideas. As a result, this should make the success guru a thought leader or mastermind on that specific subject which in turn will cause his or her reputation and authority to surge. They use this in their favor to communicate to their audience what it must do to achieve success by seeing things from a different viewpoint using vague concepts which can’t be measured. It sounds good!
Alternative and Practical Complimentary Advice
On stage, the ‘Masters at Manipulation & Emotions’ deliver glorified common sense, stirring tales of how they attained success, as well as package their most important concepts and turn them into a compelling manifesto. On social media, they deliver videos speaking about how they earned their millions. Likewise, those (self-proclaimed) success authorities use remarkably effective strategies to sell them in the form of books, talks and consulting engagements. Essentially, the takeaway from them should be how to approach personal branding with splendor.
Consider that life should be viewed as a “do-it-yourself project.” Be proactive and responsible for your own destiny. No one has a silver bullet to offer you or do for you what’s necessary to progress in your life. Furthermore, no one owes you anything! Every single one of us (barring those with physical or psychological handicaps) is capable and should be responsible for self-development and for each of our outcomes.
There are some who have stated that they have spent a reasonable amount of money on Tony Robbins books and watched free videos on YouTube. They didn’t spend anything on his costly and at times reworked courses. Perhaps this is how people should learn from such popular motivational personalities. Avoid joining and following pricey cults and simply avoid parting with your money.
As a process, this is how one should essentially consider when working on thyself (from my perspective):
1. Define/find your purpose. Discover what drives you and pursue it…relentlessly.
2. Define your goals (short and long-term).
3. Deconstruct your goals into stages and steps.
4. Create a plan with specific date targets.
5. Execute consistently. Keep pushing yourself!
6. Fail, adjust and improve.
7. Persist until achieved along with the aid of practical resources (a tenacious mindset
development is an important benefit).
8. Move on to the next.
As a final point, consider applying the SMART goals acronym to assist you in guiding your goal setting. It stands for Specific, Measurable, Achievable, Relevant, and Time-Bound. Details of this here. _________________________________________
Loyal customers are always good for business. But there are customers who are a notch better than them. Before I dive into this category, I will define what a “loyal customer” is. It’s one who regularly purchases from a particular store or chooses a certain brand repeatedly. Although they are repeat customers, their loyalty may be driven by low prices, convenience, and/or a frequent positive customer experience. A business should strive to not merely create happy and loyal customers but the type who are so enamored by your company or brand that they are willing to go out of their way to become your advocate – even if you may have disappointed them once or twice. They forgive those occasional services and quality issues but let you know when quality slips. They are beyond loyal and make purchases for themselves and others. They passionately recommend you to friends, relatives, colleagues, and others, as well as provide unsolicited praise or feedback. This is the “customer evangelist” category of customers.
Customer Evangelists as Your Indirect Salesforce
Customer evangelists influence and, in some cases, become part of a company’s volunteer salesforce and/or brand ambassador. They will not hesitate to want others to benefit as they have. The term “evangelist” is derived from the religious believers who roamed the backstreets of the world to spread the word of their faith. Beliefs are based on emotional connection, profound convictions, and arise through experiences. Strongly held beliefs impel many to tell others about theirs.
Customer Acquisition: Word-of-Mouth Still Rules
Evidence shows that acquiring a new customer is five times more expensive than keeping a current customer happy. Moreover, customer profitability tends to grow the longer a customer stays with you as it costs less to keep a customer coming back for more. Results of a study reported in 2001 by Euro RSCG Worldwide, one of the largest advertising agencies in the world, regarding the influences on buyers of consumer technology products, found how consumers get most of their information about technology products: 13 percent from advertising, 20 percent from Web sites, and 34 percent from word-of-mouth (WOM). Furthermore, 78% of people rave about their favorite recent experiences to people they know at least once per week. These results are testament to the power of what is also referred to as “word-of-mouth advertising,” WOM marketing includes buzz, viral, blog, emotional, and social media marketing.
Social Media Customer Advocates & Influencers
An “influencer” is someone who, either through his or her professional or personal brand, has a large following or audience on his or her blog and/or social media accounts such as Facebook and Twitter, whereas an “advocate” is an actual customer who has a passion for the brand and expresses that love by sharing his or her experience with others. Influencers may have a large social media following but not necessarily create the ability to drive action ─ rather it gives the ability to drive awareness. Effective influential results require audience and advocacy. Thus, advocacy is driven by the depth of conviction, and influencers typically are less committed to the product or brand than are actual customer advocates.
Loyalty or Reward Programs
There are also reward or loyalty programs specially designed by companies and brands to incentivize customers who frequently buy their products or services to be their first choice each time. Cases in point are with rewards programs such as with Starbucks where each purchase brings a customer closer to free drinks and food, Virgin Atlantic’s Flying Club a frequent flyer program that allows members to earn tier points. There are three loyalty tiers – Club Red, Club Silver, and Club Gold, each of which provides different benefits to the most loyal customers. Then there is Amazon Prime ─ a premium Amazon membership, for a certain annual cost, which provides its regular buyers with a bunch of benefits including free 2-day shipping on a wide range of products. Research shows that an effective, fair, and well-managed loyalty program works. According to Yotpo, 52% of American consumers will join the loyalty program of a brand they make frequent purchases from, and according to Bond, 84% of loyalty program members have made a redemption from the program. However, to stand the best chance of success in tough market conditions, programs must enhance the overall value of the product or service if they are to incentivize the customers to make their next purchase.
In the End
Customer or brand evangelists are customer advocates who stay loyal to a brand and make it recognized to the public on social media or word of mouth. This doesn’t simply occur on its own. It’s a process that a company/brand must design and manage through trust-building, positive customer experiences, and marketing activities. This should lead to an organic pool of natural advocates as satisfied customers are often very happy to share their experiences. Programs should also be considered and created to reward and incentivize these advocates. This is often a good return on investment. Additionally, finding and choosing people with authoritative opinions, who are followed closely by the company’s target demographic, called “influencers” may turn them into supporters as well.
I had a striking and might I dare say, haunting thought that continues to stick with me. Some years ago, I met a girlfriend through a dating site. Yes, I know this is not unusual. However, she initially remarked that I marketed myself online as if I was a (human) “product.” Through that pleasant conversation, I wasn’t certain if this was to be construed as a compliment or a criticism. Although my intent was not deliberate, I now understood the power of personal branding.
Today, personal branding is ubiquitous and an essential part of professional and non-professional activism. It isn’t different from product branding and relies on the same critical and analytical eye and criteria to float the “product” in the market. The only difference is that the product in question is “you.”
For example, if you are in the job market, the commodity you are selling is “you”. This also applies if you are seeking a promotion within your organization or whether you’re selling/categorizing yourself as the ideal independent consultant or political candidate respectively. The motives can be one or several.
The Brand Called “(Place your full name here)” No matter what your name is or who you are, you are engaged in selling an image you wish to portray to a targeted audience. Joe McGinnis in his cutting edge book “The Selling of the President” showed how this could be done effectively. The book focuses on how Richard Nixon was able to “sell” his profile to the American public in 1968.
As individuals, celebrities have pretty much mastered the art of turning themselves into powerful, eye-catching and memorable personal brands. Think Paris Hilton, Madonna, George Clooney, and Donald Trump. Even President Barack Obama, during his campaigns, demonstrated how to take an unknown quantity and build a persuasive persona.
What Can We Learn from Them? To start with, it’s not a one-off event but rather an ongoing process. Companies constantly bombard us with messages and adverts for precisely this reason. To keep us reminded of their brand and thus reinforce their brand equity.
Keeping it genuine and delivering on promises is an equally important factor to consider. Your attitude and actions, from start to finish with any task you perform, set the tone for the type of individual you are and what others can expect from you.
Create a Brand Statement and a Value Proposition Marketers, most notably, product brand managers, create messages about their products or services that encourage us to buy. Those messages tell us attributes about the product and the benefits to us as consumers if we purchase their products/services. Likewise, as a personal brand, you need to develop at least one message about yourself that tells your target market what you bring to the table, the benefits they receive from doing business with you, as well as what attracts them to you.
Your value proposition is all about your competitiveness and should spell out the strengths that surpass your competition. To put your brand to work for you in your job search, you’ll need to pull together all the pieces that make up your value proposition in the marketplace. A vibrant personal brand statement makes it that much easier for those assessing you to get an indication of what you bring to the organization.
Effective Communication Enhances your Brand Whether you’re a CEO, manager, consultant, entrepreneur, business owner, professional, or even a job seeker, you should have the ability to persuade through your written and verbal messages. This includes giving effective interviews. Effective presentation skills will not only help you sell your ideas and products but will elevate your personal brand.
Management guru, Peter Drucker once stated, “As you move one step up from the bottom, your effectiveness depends on your ability to reach others through the spoken and written word.” This effective quotation not only tells it as it is, but it also tells us a lot about Peter Drucker as an effective management expert and communicator.
Character vs . Reputation Reputation is what people say or think about you. That’s your personal brand and should be well-preserved. Character, on the other hand, is what you really are. It is crucial that you understand the distinction. It is said that character is like a tree and reputation like a shadow. The shadow is what we think of it; the tree is the real thing. Always deliver on what you promise and if you look after your character, your reputation will look after itself.
What does Personal Branding Entail? For personal branding to be effective, it requires managing perceptions effectively. This encompasses several characteristics including:
– Be Unique and Remarkable in what you do by differentiating yourself from the mainstream. In today’s crowded and competitive world, we need that extra something that sets-us apart. Be distinctive, daring and acquire a competitive edge. After all, it’s a “dog-eat-dog” environment and survival of the fittest. No matter what you do, you don’t have to live your life the way other people expect you to.
– Grooming and Clothes: — They are the packaging of your total image. The way you dress and groom says a great deal about you — whether you’re doing so out of necessity or doing it with flair, one can usually distinguish the difference. Watching your appearance also makes you feel good about yourself.
– Etiquette: — It forms a part of human interaction skills, is a strong indication of a refined person and proper upbringing. It should be applied in everyday life in a civilized society. In addition, Respect is esteem of a person, a personal quality and ability to demonstrate it to others through deeds.
Social Networking: Is it going to be Facebook,LinkedIn or Both ? LinkedIn is the number one professional network, whereas, Facebook is presently the largest personal network with over three billion active users worldwide. Each has its unique purpose. Whether you’re a job seeker, consultant, and entrepreneur or happily employed, LinkedIn can be an incredible asset for your career or business. You can connect to over 800 million professionals in over 200 countries around the world. This is a cyber venue where a polished profile with a professional-looking photo and error-free text should be the only acceptable standard. It’s a portrait of you and your brand. It’s also where you will be importing your contacts and growing your network through new connections. In contrast to LinkedIn, Facebook is geared more toward socializing purposes with friends, relatives and acquaintances.
Many companies are also taking serious notice whose idea is to engage with present and prospective clients. It’s equally important that you are prudent and selective with the type of content and photos you place on your page as anyone can come upon it through searches. The message your page conveys will either be positive or unfavorable to your image. Frequent verification and updates on both social networks are recommended. Otherwise, your profiles become stale and unattractive.
Blogging Another powerful marketing tool to consider is a blog. Writing articles for your own blog and for others will earn you consideration as a respected expert in your industry and subject matter, which, taken together, will create more credibility for you and increase your presence on the Internet.
In the Final Analysis Regardless of the business you’re in or message you’re trying to depict to your audience, if you’re going to successfully shape your brand, you need to start by knowing who you genuinely are, then form the image you want to present, and subsequently, behave the part consistently.
Everyone, it seems, has a personal brand, but most people are not aware of this and as a result do not manage it strategically, consistently, and effectively. As your own “brand,” you are the head of “Me Inc.”
How does it feel to be the CEO of your own brand and life?
Product and service pricing is a tricky strategy and depending on what is on offer − most notably a commodity, price increases can be very sensitive to the average consumer. How does a purveyor dance around this dilemma so as not to tick off its customer base? It takes several savvy and diligent tactics.
Pricing strategies
I begin by going over several types of pricing which a business will consider. These include:
Penetration Pricing: The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased.
Economy Pricing: This is a no-frills low price. The costs of marketing and promoting a product are kept to a minimum.
Price Skimming: When a higher price is charged because it has a substantial competitive advantage. However, the advantage tends to be unsustainable. The high price attracts new competitors into the market; however, the price inevitably falls due to increased supply.
Psychological Pricing: This approach is used when specific techniques are used to form a subconscious or psychological impact on consumers. The best example is when setting prices lower than a whole number such as 3.99 instead of 4.
Product Line Pricing: Selling a product at or below cost to incentivize customers and drive other sales. For example, a restaurant might offer a low-priced entrée with the purchase of a drink and dessert — both of which have higher profit margins.
Optional Product Pricing: A method applied to increase the amount customers spend once they begin to make a purchase. Optional ‘extras’, when purchased, increase the overall price of the product or service. Examples include computer printers and single pod coffee makers which mostly have a low initial entry price, whereas the cost of the ‘consumables’ or accessories, like printer ink cartridges and coffee pods, respectively, are much more profitable.
Captive Product Pricing: This occurs when an accessory product is necessary to purchase in order to use a core product. Examples of this include products such as razor blades for razors and toner cartridges for printers. This is also known as ‘By-product pricing’.
Promotional Pricing: Pricing to promote a product is a very common application. There are many examples of promotional pricing including approaches such as BOGOF (Buy One Get One Free), money off vouchers, and discounts.
Product Bundle Pricing: Here sellers combine several products in the same package. This also serves to move old stock. It’s a good way of moving old stock and slow-selling products. It’s also another form of promotional pricing.
Value Pricing: This is based on how much the customer perceives a product is worth. The objective is to make consumers believe they are getting the best value at a fair price. This type of pricing works well for ‘basic’ products that don’t have unnecessary details. Dollar stores are thriving due to value-based pricing on items that normally retail for more elsewhere.
Premium Pricing: Use a high price where there is a unique brand. This approach is used where a substantial competitive advantage exists, and the marketer is safe in the knowledge that they can charge a relatively higher price due to craftsmanship, pedigree and/or cache. Such high prices are predominately charged for prestigious and luxurious products and services.
Variable Prices vs. Fixed Prices:Also known as “Dynamic Pricing”, “supply/demand pricing”, or “time-based pricing.” It’s a pricing strategy in which businesses set flexible prices for products or services based on current market demands. Examples of this are hotel and airline pricing according to the time of year/season, happy hours at bars (downtime), and TV/radio commercials cost during peak hours. In 2020, due to the start of Covid-19, “dynamic pricing” made headlines when the prices of everyday goods such as toilet paper and hand sanitizer suddenly increased dramatically ─ though this was a combination of demand vs. supply, as well as exploitation by many resellers.
Geographical Pricing: Geographical pricing sees variations in price in different parts of the world. For example, rarity value, or where shipping costs increase the price. In some countries, there is more tax on certain types of products which makes them expensive, or legislation that limits how many products might be imported again raising the price.
The general pricing strategy to be applied will depend on different factors including product or service costs, demand, the types of buyers/target market, or customer perceived value, and external factors such as competition, the economy, and government regulations. Moreover, the consideration is taken with the current stage of its product life cycle along with its distribution and promotion considerations.
Raising prices prudently
First and foremost, be transparent. If you make the effort to explain to your customers that you have hired extra staff to deliver an improved product, or for any other reason, the customer may consider accepting the increase, otherwise, he or she may simply suspect that you are simply doing so out of greed. How you pitch and position your price increases can determine the success of your business. Equally important, when making changes to your pricing, make certain that your staff have bought into the price increases. By supporting this, it will be able to communicate it effectively to your customers.
Following are some low-key approaches to price increases.
In Consumer-Packaged Goods (CPG): Producers often reduce the product/packaging size rather than raise the price to cut costs. However, this can irritate customers as they feel cheated especially when done discreetly. For environmentalists, the optics of this tactic may be deemed effective if the brand can make a case that reducing product sizing results in reducing waste and under-use.
Create Additional Value: When raising your prices, differentiate from the competition by creating additional value for your clients. For example, if you want to stand out, you should go above and beyond in whatever you are doing so that your customer deems your brand and/or your offering as being superior to that of your competitors. You can add value to a product or service by improving the packaging or the design and adding a storyline. Moreover, refine the total customer & service experience which includes a seamless timely process and/or offer something extra without charge.
Regarding Hourly Pricing for Services: Charge per project rather than by the hour. This will place the clients at ease knowing the total cost is predictable regardless if a project takes a shorter or longer period to complete. It eliminates cost anxiety and lack of control over the actual hours undertaken and lodged by the services provider.
Consider Incremental Price Increases
By applying incremental price increases on a regular basis or on occasion, you will condition clients to expect it. Depending on what you are selling, such as a subscription service, providing adequate notice is the right thing to do. Stating the reason(s) for this imminent outcome is a plus (think transparency). This way, clients can adjust their budgets accordingly. Timing is important as your level of service and customer satisfaction feedback should align with any increase as appropriate justification.
Unconventional Business Wisdom for the refined entrepreneurial mindset - by James D. Roumeliotis 