You brand to be profitable. You brand so you don’t have to compete solely on price. It gives you something else to talk about. Unless you’re Wal Mart, it’s tough to lead on price – pretty easy for someone to undercut your position. Wal Mart certainly will. You’re much better off to compete on value. And emotion. Customers will pay more if they believe you offer them a better produce or service. Or using you makes them feel good. Or feel important.
If you charge only low prices, you’re more vulnerable to market forces. You become just a commodity and lose. Think about how a local mom ‘n pop general store would compete with Wal Mart in their town. Certainly not on lowest price. The only way is by delivering an incredible level of service and a sense of community. By making customers feel so welcome and solving their needs better than Wal Mart. Wal Mart forces similar stores to reinvent themselves or face extinction each time they enter a market. Sad but true. Target succeeds because they combine low prices with great design and fashion, but Wal Mart’s closing in on that angle as well.
Look at how the iPhone and now the iPad are driving Apple’s profits. They focus on magic and experience. So much so that a 99 year-old woman in Lake Oswego just got her first computer. And it was an iPad. Watch the video and you’ll see she doesn’t even look up at the camera. How does Apple do it? Through incredible design. By focus on what matters: the human details. Not the technical.
Strong brands allow you to price higher which increases profitability. Which makes it easier to reinvest in your business. To continue innovating for long term sustainability. And when you deliver a greater return on value, price becomes even more irrelevant. A customer doesn’t care how much better you made your product if it still doesn’t deliver. Or how hard you worked on it. They only care about what’s it does for them. When you think about your brand, envision your customer. Think about what makes them tick. What sparks their emotions. Brand accordingly.
You Brand to become a habit. Gain top of mind awareness to make it easy to choose your product fast. In Blink by Malcolm Gladwell about the power of thinking without thinking he demonstrates the power of split decisions.
When you create a brand that becomes a habit, your customers think less about price as long as you’re delivering an awesome amount of value. They won’t care about price as long as your brand solves their most pressing problems. How much more rewarding is it to create a brand where because you’re helping others with your kickass service and products, they don’t think about price? Isn’t that more fun than brow-beating people to buy your stuff? Or fighting for the scraps at the bottom just to survive?