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.
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.
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.
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.
The hospitality domain has begun recovering from its 15 month or so pause in bookings and vacancies due to the Covid-19 pandemic. Getting back to a new normal business mode requires a refined approach to attracting and retaining guests/clientele. Hopefully, the operators will profit from lessons learned from recent history along with adequate time they were reluctantly bestowed for reflection. From the following five types of hotel guests, each requires a different approach to effectively attract them. However, in regard to retaining them, the approach is the same across the board. Seamless service and creating a pleasant total guest experience will most certainly turn them as your raving fans. Nowadays, and moving forward, contactless check-in and check-out will be expected. Exceptional service should not be merely exclusive with luxury properties. Nothing can and should be taken for granted. Do not meet guests’ expectations, instead, surpass them.
1. The Leisure Traveler
The leisure industry is the segment of business focused on entertainment, recreation, and tourism. To the leisure traveler, it is about going on holiday for fun, excitement, and relaxation ─ a vacation get-away whether for a few days or weeks. This may include relaxing on a beach or on the premises and/or going on guided tours and experiencing local tourist attractions.
Offering the guest enjoyment with the ultimate mix of relaxation and inspiration is key to winning them over repeatedly.
Along with the expectations of the staff being quite accommodating, the discerning leisure traveler in a luxury hotel expects generous property amenities and refined services such as:
Complimentary fashion house brand toiletries
Nutritious breakfast
Hair styling tools
Flexible checkout
Complimentary electronics chargers
Spa & wellness niceties
Exercise facilities
Distinctive and artistic entertainment
Custom offers
Curated experiences
Fancy bathrobes
Limousine service available
Kid-friendly rooms
Premium bedding
2. The Business Traveler
Unlike a leisure traveler, the business traveler is a hotel guest who arrives strictly for work. He or she is not there to view the sights. However, this traveler will be interested in local restaurants and coffee shops he or she can use for business and personal purposes. Typically, their days are long and full of meetings. More than likely, they’ll want to come back to their rooms to relax and have a quiet meal before doing it all over again the next day. While also in town for work, make time in their schedules for more leisure and tourist activities. The business traveler might extend his or her work trip into a long weekend and have a brief vacation before returning home.
To appeal to business travelers, keep the following into consideration:
Easy check-in: Business travelers demand a quick and effortless check-in process. Always make certain you have adequate, efficient and polite staff at the reception desk to meet this need. Consider offering online check-in with keyless room entry.
In-room business features: Fast, reliable internet along with conveniently locatedample power outlets
Co-working spaces: Create spaces and perhaps restaurants too where business travelers can work or have meetings.Loyalty programs: Creating a strategy for repeat business, like offering some free nights for a minimum number of overnight stays during each check-in is one effective way to attract and create repeat business. Alternatively, extend the negotiated discounted room rate through the weekend or add a few days pre-conference to encourage guests to stay longer or arrive early.
Work with local attractions and businesses: Offer incentives like discounts at local restaurants and shops or tickets to a museum or a show.
Having a solid CRM set-up, with proper usage, will make engaging with the guests/clients seamless.
3. Families
Families that travel together want to have shared experiences. With families, there will likely be differing styles of travel and preferences within the group. The key is to have something for everyone. Think like a parent and provide in-room amenities that can keep the youngsters occupied, like game boards, books, and fun snacks. Also, offer a nanny or babysitting service and a list of family care services in the area, as well as kid and family-friendly attractions and activities, such as discounted vouchers for the zoo, aquarium, and/or museums.
In addition, offer the ability for families to avoid carrying heavy cases and flight bags by providing essential items that enable families to travel lighter. This can be accomplished with guests reserving baby/toddler equipment online via the hotel’s website. In addition to an array of essentials, such as playmats, potties, and buggies, parents should be able to also request, ahead of time, non-essentials such as storybooks, swimming jackets and even car seats requested for private transfers.
4. Event Attendees
Event attendees can be a mixture of business and leisure travelers. Some might want to attend the conference and relax alone in their rooms, and others might be looking to explore the city more in their off hours. Most often, event attendees are interested in networking with others at the event and will seek entertainment after the end of the day’s events. This is where, as a hotel operator, you can attract and retain them by providing unique experiences for attendees that they will much appreciate and distinguish you from competing nearby hotels. To entice them, offer to organize receptions and other social activities for them, prior to checking-in, and make it easy for the attendees to add on their reservation. Additional activities can include a poolside happy hour, a dinner cruise (if applicable), or other group activities at a local attraction. Provide those guests incentives and special deals such as discounts for additional night stays or an exclusive dining experience at the chef’s table of your hotel restaurant.
5. Health and Wellness Travelers
Aside from travelers in general being more aware of cleaning and sanitization due to COVID-19, wellness travelers are those who are taking a trip to promote their own health and wellbeing. This type of traveler will most likely be interested in holistic wellness packages which include relaxation, detoxing, and practicing healthy habits during their trip. Some will be more concerned with physical and mental wellbeing, therefore features such as fitness, outdoor excursions, as well as yoga classes, workout sessions, spa treatments, guided meditations, and healthy dining options could be appealing. Additionally, more people will be looking for staycation trips. As a result, hotels should consider focusing their marketing efforts on guests who reside within a two-hour drive.
Creating Loyalty through Exceptional Service and The Total Customer Experience
What good is it to be an upscale hotel establishment with generous amenities if the service is weak? The “total customer experience” is defined as the interactions and relationship between a company and its customers. The customer experience journey can include how a customer interacts with a company’s employees, facilities, and marketing, in both the real and digital worlds.
The holistic approach to the total customer experience will make the difference between a single visit type of customer and a repeat and loyal customer.
The service dimensions consist of reliability, responsiveness, assurance, empathy which characterize an emotionally intelligent and spirited staff with tangible elements in the ensuing way:
Reliability reflects the service provider’s ability to perform service dependably and accurately.
Responsiveness is a strong indicator in assisting guests and providing prompt service.
Reassurance reflects the courtesy and knowledge of employees and their ability to inspire trust and confidence.
Empathy involves the caring individualized attention the brand provides its guests.
Tangible elements include the facilities, amenities and ambiance felt by the guest directly or indirectly.
A company’s reputation for excellence in the services sector can be developed and supported, as long as the firm has a strong organizational culture oriented in high quality service, customer focus throughout the organization, as well as a dynamic set of employees. They are conscientious and committed to act within the quality standards which the company has established.
For a hospitality organization to achieve high levels of customer service and maintain constant satisfaction, it should develop and implement a structured service strategy, which covers all necessary actions on what measures and actions will be taken to:
Create a customer-centric culture.
Develop and install appropriate infrastructure service delivery system.
Identify the necessary procedures to recognize and meet the needs and expectations of guests.
Refine and encourage staff to speak with the right attitudes, skills and behaviors to internal and external environment of the company and towards the guests.
Measure – evaluate the degree of guest satisfaction.
Continuously implement practices to improve internal operations and procedures relating to excellent guest service.
Credit: Deloitte
Contactless Check-in & out
A 2020 study revealed that 73% of hoteliers agree that self-service tech will become increasingly more important to their business and when asked what makes a good hotel stay, 90% of millennials said they would be interested in checking-in in a hotel through their mobile phones. If those statistics were pre-pandemic, imagine what they would look like nowadays. Guest expectations are not static, they evolve indefinitely. Contactless check-in and check-out do not have to be impersonal. The experience can be seamless and pleasant, whereby the hotel staff can still remain in touch with guests even without ever seeing them in person. During─and eventually post Covid-19, guests are demanding the highest levels of hygiene, ‘sanitization’ and social distancing. Study shows that 84% of guests would feel much safer with social distancing practices in a hotel and 71% of guestsare more likely to stay in a hotel offering self-service technological capabilities.
On a Final Note: Targeting the Most Profitable Segments for Your Hotel
There are five main generational segments recognized by marketers. Each generation certainly differs and each of whom have unique spending patterns and personal preferences. Their main characteristics are summarized as follows:
Credit: Hotelbeds
For advice on attracting Millennials and Gen X, reach-out to me at jdrazure(at)gmail(dot)com
These days (as the writing of this article) ask employers in any sector as to what is their main pain point and you will most likely be told that staffing is definitely the one. Barely a sign that it is an employer’s market. However, changes in job vacancies will vary much by industry, geography, specific skills, educational level, and other factors.
Seems that during the Covid-19 period, many open job positions actually pay less than the expanded economic relief unemployment benefits many people receive(d) under the March 2020 CARES Act in the U.S. and CERB financial support in Canada to employed and self-employed Canadians who were directly affected by COVID-19. In fact, an estimated 68% of unemployed workers are collecting more on those programs than they earned while working. That said, there is not much, if any, incentive for such employees to return or gain employment as long as they are receiving such payments. This is a dilemma which many employers are reporting with a lack of applicants and an increase in interview no-shows.
Possible solutions and recruiting strategies to make your business stand out to job seekers during the pandemic, and beyond, should include:
1) Apply a Timely Hiring Process
Consider new methods for interviewing such as virtual interviews like Zoom or Teams, virtual job fairs, along with scheduling technology such as Calendly and text-messaging to make communication with candidates more effortless.
Utilize a third-party recruiting/staffing agency, specializing in your domain, to help source employees on a permanent or temporary basis. This is a way to spend less time, resources, and money on the sourcing and hiring process to allow more time focusing on the operations.
3) Offer Hourly Wage Increases or Bonuses
Consider offering a temporary (or permanent) pay increase for roles with essential duties and in high demand and offer a bonus for high demand jobs to attract talent. Although this increases payroll expenses, it may be necessary to attract and retain the right talent.
4) Offer Flexible Work Hours/Schedules
This may include offering longer days or staggered shifts to allow for an additional day off during the week.
5) Offer an Opportunity to Work Remotely (with Jobs That Typically Can)
Since the Covid-19 pandemic shook the standard workplace, the physical office ambiance was quickly ─ and at some businesses, reluctantly switched to working remotely. Many employees had to adapt swiftly which they eventually did and now wish to continue with this convenience. Consider either carrying-on, offering the remote home office option or proposing a hybrid whereby some days during the week or month will require a commute to the physical work location.
6) Emphasize Mid-To-Long-Term Career Growth Opportunities
To help candidates recognize the temporary nature of collecting their economic relief unemployment benefits, highlight the long-term growth opportunities available at your company. Consider including the opportunities with your posted job descriptions.
7) Ensuring A Good Candidate Experience
Candidate experience isn’t only important for employer reputation, but it is also a factor when your top candidates are evaluating your job offer. The way you treat candidates during the hiring process is a good indication and impression you convey the way a candidate may be treated once hired. positive candidate experiences can enhance an employer brand and reputation and encourage good candidates to join, as well as existing employees in providing you with additional good candidate referrals.
8) Consider Hiring for Attitude and Training for Skills
Don not solely hire well educated and experienced people. More importantly, seek motivated, dedicated, coachable and candidates with interpersonal skills. Moreover, make certain that the people you hire fit-in with your corporate culture. Your organization should also foster an atmosphere of innovation and creativity through leadership. These conditions can’t help but breed success.
In the end
Some of the above do not apply to every type of job. Though the hiring challenges during a pandemic are a temporary issue, it is frustrating enough when taking into account job seekers who may be earning as much or more money through economic relief benefits. But with the above recruiting strategies in mind, employers should be able to attract more candidates, make the right hires and return promptly to a new and refined “normal” type of business and beyond.
“A business that makes nothing but money is a poor business.” – Henry Ford
Every business launched should be infinite and earn a profit ─ unless, of course it is a non-profit organization. Profitability has an impact on whether a company can secure financing from a bank or attract investors to fund its operations and grow its business. Continuous prosperity is earned most notably by tightly controlled financial management, including cash flow/liquidity, a methodical and lean operation, and a policy with emphasis on employee, vendor, as well as on a customer focused environment.
However, many businesses are not earning a decent profit margin or produced one for some time. Those companies are at a stage where they can be profitable anytime, but they prefer to invest money back into the company to keep the growth steady. However, there are also scores of them where they cannot survive without external debt or they are operating at a highly unsustainable business model such as selling merely on price with no unique selling proposition (USP) and instead, paying more attention at how fast they are growing.
How much profit should a business be earning?
A decent margin will vary considerably by industry and size of business, but as a general rule of thumb, a 10% net profit margin is considered average, a 20% margin is considered high, and a 5% margin is low. The industries with the highest average profit margins include:
Large Industries
Software publishing
Pharmaceutical
Database, Storage & Backup
Semiconductor industry
Financial services (non-bank)
Healthcare support services
Small to Mid-size Businesses (SMB/SME)
Accounting services
Lessors of real estate
Legal services
Management companies including consulting
Orthodontic and dental offices
Computer software and hardware technical operations
Industries with low profit margins include airlines, grocery stores and automobile dealers as they are typical examples of low-margin businesses. Capital and labor intensive industries usually have low profit margins, due to massive investments with a low return or a long term return (ROI).
For a complete list of industries and average profit margins click here.
Popular newer companies with high values but no profit
Some notable relatively young companies across the tech and lifestyle sectors such as Airbnb, Uber, Wayfair and Peloton, to name a few, have yet to break even since their inception despite the justification for high valuations which are generally around the future prospect of earnings, among other factors. All highly hyped start-ups had great stories of scale, regardless of whether their stories have yet turned-out as predicted. In fact, many are actually losing millions every year during the first decade (think Amazon). Reasons for not making any profit include, in part, a large investment in sales and marketing, product development, technology and operations. Some are less efficient with scale. Consequently, to make money, they will need to re-engineer their business model and manage costs from running far ahead of revenues.
How to restore your business gains
There are several measures to take to make certain your business thrives, and profits are frequent, as well as attractive.
Your profit margins ought to be in line with your industry or better. Consider offering a premium product which will yield a better profit and reputation. Avoid markdowns as they are profit-killers. In addition, enhance your brand image and increase the perceived value of what you are selling.
Negotiate better pricing agreements with your suppliers to reduce the costs of goods and widen your margins. Negotiate for discounts. You may want to include free shipping or other offers such as receiving extra products for free. This works well when you are purchasing in bulk.
Reduce supply chain costs and inefficiencies. One way to accomplish this is by shipping product in less than a full truckload (LCL) as it is more costly when it is full (FCL). Making several deliveries each week is more expensive than just one.
Streamline your operations and reduce operating expenses. Automate specific tasks in your business such as putting repetitive activities on autopilot. This way, you can reduce the time, manpower, and operating expenses required to run your business. Cut overtime and excess staffing as much as it is feasible and control other expenses by implementing rigid budgets and needless expenses. If the purchase does not contribute to the growth and improvement of the business, it should not be made in the first place.
Avoid over leveraging as this entails having a significant amount of debt in use along with a debt service strain. While debts used to generate revenue can increase revenue and profit over time, excessive debt can inhibit profitability. Keep your debt on the wise and strategic side of things.
A business invests time, resources and money building a brand over the years. Its image and reputation are sensitive matters which should be kept top of mind as they form perceptions on the mind of the consumer. This in turn drives revenues and noteworthy profits. Thus, it goes without saying that a brand is core to a company’s success. Moreover, the leadership behind it should be making methodical decisions to retain the brand’s reputation through diligent decisions and actions. Surprisingly, this is not always the case with some brands ─ primarily the people behind it, the brand custodians, along with their organizational culture.
So, What Gives?
The main reasons why a company may be neglecting its brand image includes:
Bad products or service;
Below average post sale service;
Not delivering on promises or lying and over-hyping the features & benefits offered;
Mixing and associating politics, race, religion, sensitive causes, and rogue individuals;
Overexposure including not carefully vetting the licensees;
Not delivering on a positive and effortless total customer experience;
Lack of employee training, empowerment, motivation and not everyone being on the same page or common goal with customer centricity throughout the organization;
Paying little attention to the noise and discussions made about the company/brand over social media.
Classic Cases of Greed, Over-exposure, and Negligence
Pierre Cardin: When the late 98-year-old fashion designer with the eponymous name passed-away, he left behind a legacy mixed with unique creativity, yet his name was overexposed on hundreds of products, from accessories to home goods. From an icon to a blemished brand whose prestige waned to oblivion. For over seven decades, he designed unique and unconventional clothes which pushed the boundaries of the acceptable. For example, he introduced his “bubble dress,” a short-skirted, bubble-shaped dress made by bias-cutting over a stiffened base. He would experiment with synthetic materials such as vinyl, and Plexiglas among other avant-garde textiles. He also introduced unisex fashion which were indistinguishable between man and woman.
Later, Pierre Cardin developed licensing agreements with several industries which put his brand name on a vast number of consumer goods, including cosmetics, pens, even cigarettes. He once amused that, if given the opportunity, he may even put his name on a roll of toilet paper. As a result of his practice, he eventually cheapened his brand despite the wealth it afforded him. The overall effect of making Pierre Cardin appear on a variety of items was solely to make habitually non-fashionable products appear high-end.
By the mid 1990’s with about 904 licenses globally, his licensing overexposure led to the devaluation of the brand. In 2011, he attempted to sell his business. Despite discussions with several potential investors, he did not succeed in that endeavor.
So why did Pierre Cardin chase money to the detriment of his brand? He answered this question while defending his strategy by stating: “I don’t want to end up like Balenciaga and die without a nickel — then, 20 years after I’m dead, see others make a fortune from my name.“
The moral of the story is that a fashion icon brand which wanted to exploit its reputation and expand beyond its in-house offerings, required a strategy of licensing with a selective and discerning manner.
Donald J. Trump and the family owned Trump Organization: The former US President and once renowned NYC Real Estate developer went from a hyped-up and aspiring luxury lifestyle brand to one presently looked-upon with disdain. He spent four years treating politics, diplomacy, the climate, and the well-being of his people as trivial matters, and in the process, alienated more than half-the country’s voters. The final nail in the coffin was the backlash from the Capital riot that he incited on January 6th, 2021. Timothy O’Brien, Bloomberg opinion columnist and the author of Trump Nation, on MSNBC News declared: “Trump’s brand is associated with violence, insurrection and hatred.” The headline in an Ad Week January 8, 2020 article, states: “Exclusive: Trump’s Name, Once a Brand, Is Now a Banner of Extremism.”
According to several people close to him, winning the Presidency to the WH in 2016 came unexpectedly to Donald J. Trump. He wasn’t quite up to the task for the job, other than the prestige and power bestowed upon him. While moonlighting as President of the US, Trump spent four years destroying two brands: his own and his Republican party’s. Consequently, banks, business partners, his lawyers, and political allies have distanced themselves from the former president. Much of his licensing business, which grew somewhat following the popularity of The Apprentice TV show, has reached a low point since he became president.
Outright Reject Creating Scams and Malfeasance
Moreover, as anyone who maintains an element of morals and ethics in the business world will acknowledge, scams and malfeasance are not a good brand-building strategy. Consider the extinct Trump University: an online education scam, the Trump Foundation: a scam-packed philanthropy, and Trump Network: a multi-level marketing and devious organization.
What Can You Do to Preserve Your Brand Reputation?
Have a viable plan in place to build and preserve your reputation: It is not a onetime event, or a serious of occasional events but rather an ongoing process. Constantly monitor your brand. Be proactive vs. reactive to prevent issues from turning into a crisis.
Develop an online strategy to spot increases in negative conversation before they reach bloggers and online media.
Use social media to clarify customer misunderstandings, reducing overall complaints and building brand fans simultaneously.
Keep an open-door policy and encourage dialogue with your employees to obtain any adverse issues before they get exacerbated.
Apologize to customer complaints in a timely manner.
Be transparent when handling client issues and avoid using pretexts.
Use testimonials as these can help boost any image problems.
Reward loyal customers and supporters by making them feel appreciated.
Do not associate your brand with any rogue partners. Choose the charities, sponsorships and cause marketing affiliations carefully.
Finally, avoid being entangled with religion, politics or any other sensitive subject and institutions.
Complacency and insensitivity in your business should, by all means, be avoided let alone developing and retaining a stellar brand reputation.
Unconventional Business Wisdom for the refined entrepreneurial mindset - by James D. Roumeliotis 