Recent Dell ads feature the new campaign, "You can tell it's Dell."

I’m loving how Dell’s latest advertising campaign is moving away from the dross of commoditized, price-featured ads toward something more premium. This week’s Adweek article reveals the latest campaign theme by Wunderman, “You can tell it’s Dell.” The campaign features innovation and design, adding a twist of Apple-esque “That’s so cool” mojo. I’ve got to believe that playing the low-price game in this space has taken its toll on Dell, and inspiring customers to love the brand because of its innovation in the PC space is a great strategic move.

Time will tell—and so will the product releases—whether or not the Dell brand will live up to the expectations set by this latest campaign. I say this after earlier today having passed the Apple headquarters, whose address is One Infinite Loop. That’s so cool.

Take cars, for example. We all know that dozens of options exists that can deliver all the rational benefits: engine size, price range, fuel efficiency, horsepower, and amenities like navigation or premium sound. While I may have many rational reasons for buying a car, the emotional benefits play a huge role in helping me choose one model over another: the look, the way it handles, how safe I feel, etc. Which benefits, though, should be touted in marketing to convince the target audience to buy? Rational benefits might actually have a stronger play in helping sell a premium or luxury car, after realizing that the emotional benefits are obvious. Here’s where consumer context too often gets left out of the mix.

The question marketers ought to ask is this: How does the consumer want to feel about purchasing this product? Our research suggests that certain verticals make big mistakes by telling consumers how they should feel about their brand. A low-interest category like residential electricity, for example, might misfire by trying to differentiate its brand based on emotional benefits, because consumers don’t want to feel loyal to a utility company. Understanding the way your target wants to feel about your brand will help in deciphering which RTBs make their way into your marketing message. Another low-interest category like insurance, however, must lead with emotional benefits if it’s not differentiating on price; the consumers who will pay more for insurance are doing so because of the way they want to feel about their choice: like they’re “in good hands.” While the rational benefits are relevant for insurance, they’re secondary for premium brands of insurance, but primary for low-cost competitors, simply because the consumer context drives different RTBs within this particular category. Marketers of premium brands need to understand that, in order to convince consumers that you’re worth more, having a real understanding of want your target wants to be told is critical to influence purchase.

I know this: My wife doesn’t like it if I tell her, “Don’t be upset,” or “You should be happy about this.” My experience is that consumers don’t like it, either. And I think I’m premium, by the way.

So, while knee-deep in indexing products within the grocery, home, software, and health & beauty categories, I began to wonder what would happen if I indexed the popular sites YouTube, MySpace, and Facebook against each other. Taking information from Mediamark Research & Intelligence® (MRI), Google analytics and other special goodness (we’ll never tell!), our system plotted these guys on a scale of 0 to 100 in what we call “premiumness.”

Not all too shockingly, MySpace came in as the least premium with a score of 5 out of 100, while Facebook ranked at 49, and YouTube at a whopping 96! Among other factors, the interesting details that surface include the knowledge that 49% less information is consumed on MySpace than it’s counterparts. Also, 45% of MySpace users also use Facebook, which, if talking about cream cheese, we’d consider to be a brand loyalty problem.

The data also reveals interesting trends in the buy styles of these media consumers—20% of YouTube users fall into the category of “Buyers of the Best.” This generally denotes that they are brand loyal and tend to be willing to spend that extra dollar to get it. YouTube users also tend to have a higher overall income and have the most loyal following in incomes of $200K+.

While all this data is wonderful, how do we apply it to marketing in the real world? It may not seem too far-fetched from our current assumptions that YouTube is pandemic, Facebook is getting there (if China will let them), and MySpace is just plain sad. However, when structuring a marketing plan for a brand that utilizes these three modes of social media transportation, it is emperical evidence that it does matter which brands advertise where.

For instance, even though my last post indicated that 18–22 year olds are now purchasing more specialty food items, a such brand should not inherently push all their efforts into a MySpace campaign. We learn in this study that not only are MySpace subscribers less loyal to brands, they also aren’t the 18–22 year olds with the cash to spend. Also, they tend to lean toward coupon purchases, which most specialty foods cannot afford to do.

So, while this exercise is not 100% fool-proof—and is done mainly as an illustration (we charge for the real thing!)—it does convey the general idea that not all entities within a category can be premium. There are definite factors determined by the consumer’s perceptions, behaviors and experiences that shape what your brand is. And doesn’t it just make you the least bit curious to find out how premium your brand is?

Why would a premium brand like Starbucks go to all this trouble? They claim that slow foot traffic and declining sales inspired the transformation, but I think there are better ways to be a good community citizen than apologetically relinquishing the brand identity that has become a household name. Perhaps they’ve oversaturated the market with too many locations. Perhaps they’re too accessible, and now not as special as they used to seem. But they’re still a great brand, and I think they make a great cup of coffee.

I don’t mean to sound like I’m picking on Starbucks, but I think they’re making a big mistake. They’re abandoning the premium brand they’ve worked for decades to build. I’m actually a big fan of the brand, and of their coffee. When I travel, that backlit green circle in the distance is a beacon of comfort and familiarity; I can know what to expect when I order my grande no-whip mocha and cranberry orange muffin. Isn’t that what a premium brand is supposed to do? Create expectation, leverage familiarity, and inspire loyal purchase behavior?

Don’t apologize, Starbucks. You’ve built a great brand, but don’t try to appease consumers by saying you’re someone you’re not. Let your brand adapt and stay relevant, but don’t abandon it. What you’ll find you’re creating in these “unique,” unbranded locations is something that’ll be hard to take ownership of from a branding perspective. Not to mention the fact that you’re leaving yourself wide open for consumers to accuse you of lacking authenticity.

I’ll stick with Starbucks. And my grande mocha. And when I’m feeling like an extra treat, that iced lemon poundcake.

As we observe the responses and insights provided by our Premium Brand Panel, we realize that consumers are willing to pay more for certain brands, as long as the brand meets their expectations at a price they can live with. Although private label brands have gotten much attention, many premium consumers are wary of the short-term concessions and inferior ingredients in less-expensive alternatives. However, the brands that have lost share to private label are discovering that they haven’t done enough to differentiate their product quality, nor have they built their brand as the premium brand they thought they were.

For example, a person who makes $150,000 a year may consistently buy cheap toilet paper; he or she has little expectation from the product and isn’t willing to pay for extra fluff (literally, in this case). On the other hand, a lower-income person may see toilet paper as an affordable mini-luxury, and therefore they’re willing to pay the extra $1.50 for four rolls in a pack. In this instance, the premium consumer is the lower-income household inspired by emotional benefits versus the higher-income household that views toilet paper as only delivering rational benefits.

For more information on what makes a brand premium, visit my post on the topic or visit our website.

The truth is that it’s easy for agencies to be willing to be the first one out there doing something new—they’re not spending their own money to do so. The agency gets the credit if it’s a hit, and if the idea tanks, well, the agency just shoves it under the "learning" rug. Doing something new not only requires innovative execution, but in this day and age it also requires innovative financing.

Warren Douglas has developed project partnerships for several clients that not only allow us to stick our toe in the water before diving into a new initiative, but projects that also take the edge off the front-ended cash investment for the client. Marketers (the clients) have to also be willing to view the agency as a true partner in their business, rather than viewing them as a disposable commodity that will be tossed after next year’s budget review. To make something new work well, both parties have to commit to a relationship in which both parties make meaningful investments and share in meaningful rewards.

It’s time that brands look beyond this quarter’s budget and realize that discounts alone can’t make consumers loyal. Consumers who only buy on deal are fickle, and the value of the brand is what will allow you the headroom to be more profitable down the road.

The big question for commodities: do your customers want something more from your brand? If you’re willing to provide it for them, you can likely charge a category-appropriate premium for it, and gain brand loyalty in the process.