I am the guy whose broad alligator smile gives you sleepless nights. You shudder at my one-too-many backslaps, my pretensions to be your best friend, my just-for-you secret deals, and my eternal, sunshine optimism.
I know, I know. You would rather reverse into a dead end than run into me. But, hey, I am a used car salesman. And before you jump to the accurate assumption that I am going to bend my ethics for a quick sale, I have a bit of advice just for you. You don’t have to buy it. But you can listen in...
See, the trouble with you marketers is that you make the same set of mistakes generation after generation. Most of you premeditate, like I always do, how much you can rip your customer off before he decides to move on. Sure, some deals are steals. But when you create ordinary products and expect people to pay extraordinary prices for them, then you have a problem. Taken the other way, some of you create extraordinary products but are afraid that people will find a cheaper alternative. So you sell yourselves short. Commoditising your brilliance for the sake of market norms.
Now don’t get me wrong. Norms are good; they set standards and expectations for what people will pay. They create an environment of security and equity where price can tell its story. In fact, in many developed markets, category leaders know how to set benchmarks so that the products and services they deliver feel rightly priced in order to stunt the hunt for cheaper alternatives.
But then, it is not always so obvious. Some truly great, revolutionary products demand time and patience to understand. But the convenience-wired customer will undervalue them like yesterday’s news: important, but useless. This becomes starkly apparent in the digital market where the marginal cost (just a fancy way of saying the cost of producing one more unit) is often zero. Which means, the more something is perceived as no different than the next best alternative, the less likely it is going to be valued; and more likely to be swapped for its cheaper twin.
On to sliced bread. It’s everywhere and costs nothing. So if you have a choice between two brands, you will go cheaper. Because one is as good as the other. But right next to them there are breads with a story: the multi-grains, the organically-yielded, the baked-in-brick-ovens, packed with super-grains like quinoa or spelt, or simply gluten-free. And these breads cost more. As much as those alluring artisan breads – the croissants, brioches, pitas or sourdoughs – whose stories can be traced back to the ancient Egyptians. Or so we like to believe.
The cost it takes to make something is of no consequence if people find a less expensive alternative. In other words, every time you don’t give us a good enough reason to pay extra, we will switch to a good enough alternative. But if you want us to pay more, you need us to believe that you are worth more.
Which is why luxury goods, for the reasons stated, have few real alternatives for those that value them. Luxury goods can actually claim the mantle of enjoying brandhood – if by ‘brand’ we mean the difference we can ask customers to pay above and beyond the cost of production.
Sure, there was a time when luxury goods really were better. They were crafted better, looked nicer, lasted longer. But with quality being the price of entry wherever standards and regulations matter, your shirt from a high street departmental store is more than likely to wear as well as the one from the high end boutique. So the quality that luxury goods have mastered is actually of a different kind: it’s called originality. Or, the price of entry into our imaginations. Simply put, they have a better story to show and sell. They are worth our time and money because they are worthy of being talked about.
The moment we understand that we are in the business of producing a luxury good, we will understand that our products and services have to be more than just good enough. They have to be flushed with awe or wonder or emotional voltage. If not, customers will look for cheaper alternatives. Cheaper agencies. Cheaper media. Cheaper professionals.
So it’s critical to come together. To set a norm with higher benchmarks. To create the kind of value that has nothing to do with marginal costs. To create a platform where great work matters and delivers. Because in this way, everybody’s worth will go up.
Faraz Maqsood Hamidi is CE and CD, The D’Hamidi Partnership.