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.

As I culled through my morning emails, I noticed that of the many emails in my Inbox, 45 were from retailers! And what surprises me the most is there were repeat offenders—3 from Gap, 2 from Overstock.com, 2 from Godiva, etc. How in the world does Gap have enough relevant material to contact me three times in one 24-hour period? And why would I care three different times? Needless to say, I didn’t even open them. And others feel the same way apparently. According to a new poll from the Chief Marketing Officer Council, 64% of consumers say promotional offers dominate both the email and traditional mail they receive, and only 41% view these as must-read communications.

Knowing your customers, especially those who have enough positive disposition towards your brand to give you permission to contact them directly, is essential in building a premium brand. If you can’t be relevant, then why bother? The numbers don’t lie.

Liz Miller, Vice President, Programs and Operations, CMO Council, said “Irrelevant, impersonal communications… (do) not engage a receptive recipient… customers will disconnect and stop doing business with brands who continue to send messages that demonstrate a lack of intimacy, customer insight and individual understanding.”

In the end, there has to be some sort of strategic plan and knowledge of the individual consumer in place. If the powerhouse of social marketing hasn’t proven this already, each consumer wants to have a unique voice, and needs to be marketed to independently.

So, the question a premium brand manager should ask themselves is this: do you manage your information to keep things personal for your consumers? Or, are you just creating opportunities for them to opt-out of engaging with your brand?

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.

What’s more dangerous than avoiding social media is the mistake of not participating. Food manufacturers, for example, have the opportunity to quickly either dispell or address head-on the consumer concerns that might get brought up in social media. What’s risky is not having the ability to participate in the dialogue, or coming to the party too late to be seen as credible. There are lots of references for this kind of address, including a prominent effort regarding Starbucks. You don’t have to be a mega-brand like Starbucks to have a comfortable dialogue with consumer advocates, or with consumer adversaries for that matter. For sure, though, if you’re a premium brand, the realm of social media is a space you shouldn’t ignore, especially when your fans are gathering online on their own.

Social media will only prove to be a threat to premium brands that opt out of the conversation.

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.

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.