What makes a premium brand premium?

I was thinking the other day about the DNA of premium brands.

One thing is certain -- it's a relative idea. For example, Hyatt is not a premium brand if you're used to staying at a W or a Ritz Carlton. But if your vacations to date have been holed up in a Holiday Inn, then by all means a stay in a Hyatt is a premium experience.

Another thing is certain -- a brand is considered premium only when we believe it is worth the price. And that's where we can dig deeper. Why are we willing to pay more for a product when there are others that provide the same service or function at a lesser price?

I have spent a good part of my marketing career developing strategies and ideas for a wide range of  premium brands, including American Express, Sony, Callaway Golf, Hilton, Jaguar, Land Rover – even the Toyota Prius.  Through these experiences I have come to believe that a premium brand is built upon specific tangible and intangible attributes that give it a sense worth:

• Sensual – It arouses our senses and feels indulgent.  It is an experience.  We want to touch it; we enjoy looking at it.  (Think about Steve Jobs' obsession on how a iPhone should feel in your hand, or how Jet Blue orchestrates a total sensory experience – from snacks to entertainment – to set itself above the fray in a fiercely competitive category.) 
• Mysterious – It draws us in deeper and reveals more to us over time.  We are intrigued to learn its back story.  (Witness how Land Rover cultivates its image as a global trekker to set it apart from the herd of grocery-hauling SUVs.) 
• Rare – It represents a discerning choice, intriguing because it is uncommon.  (Audi has cultivated this particularly well – the thinking person's alternative to BMW and Mercedes.)
• Confident – It projects a feeling of intrinsic worth.  (Burberry didn't ask permission to transcend its classic trench coat.  It confidently asserted its plaid on to a wide portfolio of products and dared us to question its right to do so.)
• Authentic – It knows its "true north" and remains committed to this ideal.  (Ritz Carlton's premium experience is a direct result of its mission statement – "ladies and gentlemen serving ladies and gentlemen. " With this simple ethic, the hotel's employees know exactly the business they are in and how they should serve customers. )
• Quality – It is consistent and shows obsessive attention to detail.  (Tiffany understands the premium cues conveyed by a detail as simple as a white bow on a blue box.)

Managing a premium brand is one of the most difficult challenges in marketing. Like any business, premium brands must pursue growth strategies. However, unlike many mainstream businesses, premium brands must do so in a way that doesn't dilute the brand's image or the user's sense of exclusivity and pride. Certain strategies are off-limits. Brand managers for premium brands must know when it is best to pass on short-term growth opportunities that could tarnish the brand's long-term health.

Marketing a premium brand demands that we think through every facet of the brand experience.  Packaging matters.  The choice of materials and lighting in the lobby matters.  Attentive customer service matters.  And within the company itself, culture matters.  Culture is often the alpha and omega of successful brands – particularly in the case of premium brands.


NOTE:  This is updated from an earlier post.

Is digital killing luxury brands?

Oddly enough, this is not a question that's keeping me awake – it's one recently posed by Adweek.  I'm writing this because I disagree with the article's central premise:  the web's democratizing power might weaken a luxury brand's cachet.


The article suggests that most luxury brands were slow to embrace "new media" because the web makes brands too accessible.  (By the way, if you want to make a 30 year old laugh, refer to the web as "new media.")


To address Adweek's question we need to tighten the vocabulary.  I don't believe cachet comes from offering a luxury, it is about being premium.  A brand is considered premium when we believe it is worth a higher price.  That's how you measure cachet.  


Certain brands compel us to pay more even when there are others that provide the same service or function at a lesser price.  Previous wikiposts have explored this point.  Having worked with brands such as Sony, American Express, Jaguar and Land Rover, I tend to believe premium brands are built on a core set of attributes that give them greater perceived worth – e.g., sensuality, rarity, confidence, authenticity, quality.


Brands are defined by creating an empathetic relationship with customers.  Those brands that offer a premium lifestyle or image, in particular, are often defined by what they do, not just by what they say.  In other words, it is our experience with the brand that helps define its worth.  Part of Apple's worth is the retail experience; part of Nike's worth is its authentic and deep involvement with athletes at all levels; Land Rover's cachet is in part formed by the off-road test tracks at the dealership, and the fact that its showrooms feel more like an LL Bean store than a car dealer.


Given the importance of orchestrating rich experiences, no medium is better suited for this than the web (other than event marketing).  Interactive platforms, whether a website or an app, offer the opportunity to inspire deep engagement, personalized experiences and highly emotional storytelling.  These tactics can build mystery, exclusivity, a sense of authenticity and craftsmanship – the hallmarks of a premium brand.


The web's accessibility is not the point.  A Burberry store in a mall is equally accessible.  It is the experience that Burberry creates in its stores that makes it feel premium and exclusive.  This same attention to detail when designing the in-store experience – e.g.,lighting, surfaces, wardrobe, signage, product displays – is required when designing an online experience.   

Marketing's new normal.

There seems to be a steady stream of books offering breathless predictions about the death of advertising and, by extension, agencies.

I’ve recently come to believe that the Chicken Littles who squawk loudest about the perils of not embracing the new normal in marketing are secretly rooted in the past.

Good marketing professionals – marketers and agencies alike – realized this several years ago, adapted and got on with things. Successful companies tend to do this. Others don’t. They go out of business. Just as Mr. Darwin predicted.  Moreover, the next generation of talent streaming into the marketing field are probably clueless as to what these authors are debating. If you want to make a 25-year-old ROTFL (whether they be a brand manager or a copywriter), refer to the web as “new media.”

Those who still go on about the how the business is changing do so because deep down they still use the wonder years of network television and national magazines as the yardstick by which to measure change.

The new normal banishes words like "traditional" and "nontraditional." Is a print ad with an embedded QR code traditional? Or how about bus board with a mobile call-to-action? You get the point.

The new normal doesn’t view "brand" through the narrow lens of a product’s TV or print campaign because consumers build brand impressions through a complex mix of first-hand experiences, peer opinions and, yes, intangible and emotional imagery.

The new normal views interactive media as a powerful brand-building medium because it has the ability to inspire deep engagement, expose customers to peer reviews and immerse customers in highly emotional brand narratives.

The new normal embraces media as a source of creativity, not as the pipes through which we beam ideas. The context in which we appear in a customer’s life is often as important as what we say.

The new normal embraces metrics, both hard and soft. Those who embrace only one set over the other will struggle. Ignore ROI or store traffic and nobody will care about the awareness gain. Likewise, click-through rates at the expense of relevance, differentiation and likability will not sit well when the brand degrades to commodity status. True professionals work hard to balance these seemingly conflicting goals, and that’s why they’re good at what they do.

The new normal also recognizes the business value of TV, print and radio. Good luck reaching C-Suite executives with a viral video, or my mom, for that matter, through Twitter. And let me know how efficient your street teams are relative to a spot on an NFL game in reaching millions of guys. When we close our eyes to the power and effectiveness of mass advertising, we are as blind as those who ignore the creative possibilities within social media or mobile marketing. True professionals embrace all forms of marketing and know when and how to deploy each.

So let’s just get on with it. The industry doesn’t need to change. It needs a good dose of creative destruction. Let market forces take their toll. Those who embrace the new normal will prosper. Those who don’t will not. Couldn’t be simpler. Don’t you love capitalism?