Your prices are a part of your brand communications. When customers see a high price tag they receive a message, “This is worth more than other products of this type.” But a question immediately follows: “Is it worth what they’re charging?” We expect high prices to reflect the real worth of an offering, and we are often willing to spend more — but only if we know that we will receive more.
Brands can be formed from this dynamic. A parent company can create different brands with different offerings that convey different messages, all presenting different perceptions of value. Old Navy, Gap and Banana Republic are all owned by Gap Inc., but the three brands are distinct. Each store sells clothing, but the value they offer is a function of both price and how those prices are justified in the minds of consumers.
A luxury salon charges $150 for a cut and color. A less expensive salon charges $50. Customers at both salons expect to get good service, but the luxury salon must justify the price in some way to create an appropriate brand, spending more per customer to create an offering worth three times what the other salon charges. This perception of value is created in the mind through every facet of the communications puzzle. It should be clear to any potential customer that the luxury salon offers better equipment, superior products and a more experienced staff. Aspects of the business that might not be considered communications — a desirable location in an upscale shopping center and beautiful interior design — also convey the value of the services. Every aspect of the customer experience justifies the price tag. Any missteps shatter this perception. The price you charge and the experience you provide must be clearly defined as you develop your brand.
Shoes and jeans work the same way. You can buy jeans in a wide range of prices, from a few dollars to thousands. Sneakers are no different. But you can’t just add a price tag and assume that customers will see parity between what you offer and what it costs — the value must be created in the mind.
Janna’s Jewels and Anna’s Adornments
Jewelry comes in a wide range of price points. Pieces made with gold and platinum, set with real stones and pearls, can escalate into hundreds of thousands of dollars. Costume jewelry, on the other hand, can be very inexpensive. Even though the products are similar, the markets at the two ends of the spectrum are completely different.
Janna loves making jewelry. She began offering her creations to friends, which quickly turned into a business. She developed a unique style and established a solid brand with a devoted customer following, crafting pieces that could be worn to even the most casual events. These pieces are largely interchangeable, giving customers the opportunity to mix and match from a wide range of stones and metals. A customer might wear five or six complimentary bracelets or combine several of her signature “gold braids” into an interesting choker.
She created a brand from her nickname, Anna, a leftover from childhood when she had a hard time pronouncing the “J.” Anna’s Adornments are marketed primarily online to a young customer who values the ability to customize a look.
Over time, Janna began learning more about the history of jewelry and started making more elaborate pieces from more expensive materials. This new jewelry was intended to be worn as a set – a pair of earrings, a bracelet, and a necklace made from the same materials featuring similar designs. These pieces were more appropriate to formal events. Yet it surprised her when she found that her existing customer base resisted, preferring her casual, customizable line to her historically-inspired pieces. When she sent out some online surveys, she found that price wasn’t the primary objection, it was style. Her younger customers simply weren’t interested in a more traditional look, with one exception: formal events. But her customers didn’t want to spend thousands on jewels for a big party or even a wedding.
Rather than give up her new line she decided to market it under a new name, creating a different experience for customers who wanted — and who could afford — more expensive jewels.
- She began by creating a new brand, also based on her name, adding the initial “J” back in and calling the new line “Janna’s Jewels.”
- Instead of selling her new line online, she began reaching out to local retailers, asking for display space in their stores. These were high-end shops offering special occasion dresses more suited to the style and quality of the jewelry in her new line.
- She created a new website with a much more sophisticated look and feel. Instead of offering dozens of pieces per page she created individual pages for each set, usually including a necklace, bracelet and earrings. Each page included images that describe the historical and cultural influences that inspired the set.
- She also began offering personalized jewelry consultations with customers from the high-end stores that carried her line. When a new customer chose a formal dress for an event she would sit with the customer and go through the sets that work best with the gown.
- These consultations turned into a new loan program, allowing customers to rent her pieces for an evening or a weekend. This satisfied the needs of many of her younger customers and kept them from shopping elsewhere.
- She also began working with local photographers as a consultant on photo shoots. Young women, looking for head shots for online profiles and professional development, could “rent” her jewelry for a few hours while their photos were being taken.
- These photo shoots began working their way into her social media presence. She began using customers as models for her jewelry in her Instagram feed, which became a popular way for her to stay present in the minds of current customers.
- To convey the quality and history of the new brand, Janna created packaging that reflected a more expensive product, using vintage styling to craft boxes, bags and custom ribbons.
- Janna also produced a small catalog that was placed in each shopping bag and displayed at each retailer who carried her line. This more traditional marketing channel appeals to an older clientele who shops less online than their younger counterparts.
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