What’s the difference between a budget airline and a pig? Pigs fly more often – and on time. Harsh perhaps, but it’s a reminder that in a market, there is always a price to pay, and the price is not just about money down.
Some people will be happy with budget. It’s worth a cancelled flight or two for the savings they make. For others, that’s far too high a price to pay for a few dollars saved.
Years ago, I was in a workshop where three people in the group were asked to make the business case for luxury over economy. The team made their case in a pointed and dramatic way.
First, they invited the wider group into a huge open sunny space, where sofas were laid out. Each person was escorted to a sofa and provided with bubbles and canapes. There was a sign on the wall that read $3000. Then, we were invited into a second room. This room was smaller, and instead of couches there were seats. Each person was asked to sit where they wanted and they were provided with a cup of coffee and a magazine. The sign on the wall read $1000. Then we were pushed and hussled into a third room. It was dark and small, with no outside windows, and instead of chairs we sat at school desks all bunched together in one corner of the space. Each person was told where to sit and all they were given was a glass of water. The sign on the wall read $500.
When we returned to the workshop meeting room, there was a simple question waiting for us. It read: Which room would you rather pay to spend 12 hours in – and why? Then we were asked: Which room would you rather pay to spend 2 hours in – and why?
You can imagine the discussion.
Each person will trade off what they get vs what they pay as they see fit. Some would rather fly on the plane and stay in an economy hotel no matter what the length of the journey. Others will want the reverse. And that model transposes almost everywhere you look. The main cinema vs the gold lounge. The budget burger vs the gourmet burger. Supermarket vs deli. The cheap perfume vs the eau de Cologne. Environmental vs irresponsible.
And no-one will do this uniformly. The days of the holistically budget buyer or luxury buyer are gone. Depending on what’s important to us, we’ll shift between budget, standard and luxury in most of our purchases.
That makes understanding what we are getting for our money even more important.
The key point for brands is that they need to make it very clear to their customers what the trade-offs are. Most don’t. They don’t carry storylines that explain why consumers are paying what they’re paying and why they’re getting what they pay for. They sell an aspiration – which of course is a key aspect of marketing – but it is an uninformed aspiration because they often don’t position price as an expectation indicator. They still see it, and treat it, just as a cost.
In the context of branding though, price is more than what goes in the till when the product walks out the door.
Price, when it is talked about, should be the clear and present underwriter of the experience. Chanel shouldn’t ever seem cheap. If it is cheap, it’s a fake. Walmart shouldn’t seem expensive. Neither should Coke.
If your price is right, your story is clear and your service is delightful, appropriate and framed to that price, no customer should ever walk away from the brand disappointed. They may walk away for another reason – because they’ve shifted their priorities or they can’t afford what they once had – but if they walk away disappointed, there’s only two conclusions.
People didn’t get what they thought they were paying for.
And if you don’t set that expectation, they will – which means, it may not align with what they’re actually getting.