Every couple of months I’ll run into a social post that shares the Tiffany $2000 paperclip. It’s generally accompanied by a pithy caption about “charging whatever you want because someone will buy”.
For most entrepreneurs, this is terrible, terrible advice.
There’s more to pricing than magical thinking. It would be nearly impossible for the average business to sell a utilitarian product for a premium price without first having the brand value of Tiffany.
So, what is brand value?
Seth Godin wrote, “A brand’s value is merely the sum total of how much extra people will pay, or how often they choose, the expectations, memories, stories and relationships of one brand over the alternatives.”
Or to put it another way;
“50% of customers would pay a 20-25% premium for their favourite brand”
-Marty Neumeier, ZAG
Markets are riddled with examples of the value of a strong brand.
Coca-cola is essentially sugary brown carbonated water and it’s nearly identical to No-Name Cola. However brand name Coke is 25% more expensive.
Lululemon sells leggings for over $100 per pair, yet there are stores selling leggings for as low as $25.
How do you increase the value of your brand?
Wouldn’t we all love to be bringing in 25% more revenue?! (Or more?)
Ultimately, brand value is predicated on brand loyalty. People will spend more with a brand they love and want to belong to, because they are convinced that brand is better than any alternatives.
In order to build loyalty, your audience has to understand who you are, what you offer, want to belong to your world, and be unwilling to abandon you. So how do you grow loyalty? Here are four steps that are a crucial place to start.
Many entrepreneurs spend the bulk of their time marketing their offers. They can tell you the features and benefits and how it is better than the competition. These are all important things to be able to articulate but they leave out the emotional component, and people make decisions emotionally. If you want them to belong to your group, they need to have a reason to like you.
In the context of a brand this means; does your business reflect their values? Do you give them something to be proud of that no other business does? Do you entertain or educate them?
- What do you value, and how do you show that in your marketing, your offers, your customer service?
- What’s your north star? What are you ultimately trying to achieve? (This is typically something you can never reach, but that you are always trying to improve upon.)
- What are the key pieces of your brand personality you want to highlight? Are you funny? Cerebral? Warm?
Know your audience
Who are you selling to? Most entrepreneurs know that “everyone” is definitely not an answer. But how well do you know your people? The internet is riddled with “ideal client avatar” worksheets. I believe these are largely useless as they rely on building a fantasy person. This is why when I work with clients on their branding, I interview their past customers in order to get real information on how the brand is perceived. You can do this today.
Ask yourself (and your clients!):
- Who has bought from me in the past? What problem(s) were they trying to solve?
- What do the people who buy have in common?
- What do they say about working with me or about my products?
- What hesitations did they have about working with me?
- Why did they choose me?
Knowing the answers to these questions allows you to get really clear and consistent on your messaging and to be able to make quicker decisions about what to sell and how to price.
Consistency is a key element to increasing brand value. Customers need to encounter your brand 5 to 7 times before they will remember it. (Lucidpress) Consistent visuals, voice, and story topics all contribute to a sense of trust; consumers know what to expect when they encounter you which helps them to relax and listen to what you say.
Consistency also helps build your brand awareness. Brands that are consistently presented are 3 to 4 times more likely to experience brand visibility. (Lucidpress) In a nutshell, this means that if you always look and sound the same, you’ll be recognized and remembered more readily.
So consistency comes in two flavours; branding and marketing. On the brand side, consistency refers to colours, images, typography, voice, personality, stories. On the marketing side, consistency is continually showing up where your audience can find you. Both are important in increasing brand awareness and brand value.
Lastly, be patient. Building brand value is a long game that never ends. Building a brand foundation that you consistently reinforce through all your touchpoints will continue to grow your awareness and increase your value.