Is Value the New Black?
9 INCH AXIOM – Value
‘Price is a relative thing. Value is the real barometer affecting purchase intent’
I listened to a great vodcast on my way home from work last night. Jason Calacanis interviewed the CEO of savings.com Loren Bendele. One of the things that struck me was the premise that ‘value was the new black’. Today’s economy is forcing both brands and consumers towards a ‘value’ model. Coupons and savings are in vogue.
Consumers are expecting more value. According to the 2009 Brand Keys Customer Loyalty Index, successful brands are those that stand out because consumers think of them as valuable. They don’t see the term value as a synonym for “cheap.” One of the key findings of the Index is that consumer expectations regarding brand value increased 20% this year versus last.
Coupons vs. Britney Spears
You know times ‘they are a changin’ when you hear things like, “The search phrase ‘COUPONS’ was more heavily queried than the term ‘Britney Spears“.
Is it just frugality or has ‘value’ become the new black? Last week I wrote a post on how consumers make decisions on predominantly two factors: value and maintenace [value / maintenance matrix]. DEAL is no longer a bad four letter word. It’s a badge.
The KEY Question: How do you promote value and stimulate sales without cheapening your brand? Your thoughts?
Today’s Lagniappe (a little something extra) - Coupons helped build the strongest global brand in the world: Coca Cola
In 1887, the Coca-Cola Company was incorporated with Asa Candler as one of the partners. He transformed Coca-Cola from an insignificant tonic into a profitable business by using innovative techniques. The key to this growth was Candler’s ingenious marketing including having the company’s employees and sales representatives distribute complimentary coupons for Coca-Cola. Coupons were mailed to potential customers and placed in magazines. The company gave soda fountains free syrup to cover the costs of the free drinks. It is estimated that between 1894 and 1913 one in nine Americans had received a free Coca-Cola, for a total of 8,500,000 free drinks. By 1895 Candler announced to shareholders that Coca-Cola was served in every state in the United States. [Source: Wikipedia]
Check out this recent case study from the folks at Coca Cola on the power of sampling. I like to call it ‘Don’t Dew It’.
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Couple of good comments I received from a friend via e-mail:
Regarding your blogpost today….couple thoughts on the topic of
“value”.
1. Make your “proposition” MEANINGFUL to your constituents and you won’t
sound cheap…I think Wal-Mart has done a great job. How does a company
who’s approach is “Everyday Low Prices” put a top spin on why you should
come in? “Save Money. Live Better.” (and they kept it SIMPLE)
2. Love your thought about price versus value. When I was buying my
first house, and we were debating all the facets of what’s good and bad
and right and wrong with each house we saw, I heard this from an old
time realtor…”There’s only ONE THING wrong with EVERY house. The
price.” In other words, you wouldn’t even look at the 2 BR 1 BTH on the
railroad tracks (too small, too noisy) priced at $600k. But maybe it
would look pretty good, if say, it were priced at $350k (we can put on
an addition! we used to live with NYC noise!).
Aaaagghh….the “leave a comment” is sssoo obvious….how could I have missed it….
interesting recession marketing piece….and always love the lagniappes.