You need look no further than Apple for proof of this. When cell phones reached their zenith, Apple presented us the iPhone. After they sewed up the new smart phone landscape, they turned around and introduced an entirely new category—the iPad.  Instead of resting on their laurels and simply issuing new colors of iPods or new sizes of Mac laptops, Apple regularly blows the market away with all-new stuff. And consumers react accordingly, by buying it all up as fast as they can.

Now, you might be thinking “sure, electronics are always innovating to survive; that’s nothing new.” But in Apple’s case it’s innovation in the purest sense—completely new categories of products that work brilliantly, look terrific, and are unlike anything we’ve seen before.  That’s innovation. Not just a new and improved screen technology or faster processor, but a whole new mousetrap.

And, great innovations by premium brands aren’t limited to electronics or software. Packaged goods are getting in on the act.  A recent article in Ad Age (Oct. 25, 2010) pointed out that innovative new premium products from Estee Lauder, Lancome and Procter & Gamble have found success.  As well, new shaving innovations from Schick and Gillette helped bring a 35% increase to the shaving category. Even the most basic of brands, Kotex, hit the jackpot with a premium-priced and newly designed “U” line of products. They saw a sales boost of 13% in one category and 57% in another.

So to those who own or work with a premium brand that could use a boost (and couldn’t we all?), consider stepping out of your comfort zone and making an innovative move within the category. You could be rewarded with some very premium results.

Six months ago, this iPad wasn’t a necessity. Now it absolutely is. I have an “extra” device that doesn’t do as much as my iPhone does, but somehow I don’t mind. This is the magic of Apple—their innovation, attention to detail, pioneering the user experience, defining for consumers what they want even before they know they want it—that makes them a premium brand. Retail stores everywhere are struggling, but inside the Apple store, it’s all buzzing. Dozens of people are waiting in line to upgrade or buy, spending hundreds or thousands at a time. Amazing.

By our definition (see What Makes a Brand Premium?), Apple serves as an excellent example of what makes a premium brand. They’re almost never on sale, and I gladly go back, time and again, for more of what they have to offer. The iPad is more expensive than the Kindle, and clearly worth more.

I’m find myself asking, “What’s next, Apple?” I don’t know what’s next, but I’m anxious to find out. And it won’t likely be cheap. Premium I tell you, premium.

I am not alone in my observation. According to Andrew Hampp, writing in a recent edition of Advertising Age, “brands and ad agencies are rediscovering the power of original tunes in advertising campaigns. Over the last decade the trend was to license famous pop songs from the 60’s, 70’s and 80’s, instead of creating an original branded melody. Now marketers want original music for their messages.”

This makes perfect sense to me, as I’m a custom jingle lover from way back. With a custom jingle crafted solely to sing the praises of a brand, you have the opportunity to ingrain your brand attributes and identity into the minds’ of the masses–in a way that can be both pleasing and entertaining.

Think about it. Who can forget the undeniable charm and sing-along-fun of such jingle gems as Oscar Meyer’s “My Bologna Has a First Name,” or Alka Seltzer’s “Plop Plop Fizz Fizz,” or Folgers “The Best Part of Waking Up?”  These pleasant little ditties are now a part of our collective conscience, instantly remembered and still fun to sing out loud.

Talk about brand recall!

That type of brand-centric popularity is far more of a premium for a brand than simply an association with a well-known song or recording artist.  When you allow the right melody and lyrics to showcase your brand, something very special can happen.

Just ask Oscar Meyer.

One interesting seminar I attended features the NASFT 2009 Specialty Food Consumer Information. Without giving the farm away, there were some staggering realizations in this handy dandy little book that raise some very good questions. When I think of advertising in the specialty food category, I immediately envision those ads targeting older women and their family, making great choices for the home with a little extra expendable income. However, the latest data seems to show some staggering shifts in consumer trends.

The report shows that 57% of the 18–24 demographic purchase specialty foods, as opposed to the 38% of those 45–54. Of this large population of youngsters, 64% of them are buying specialty cold beverages (whoo, hoo to Red Bull!), and the majority admit that they buy these items outside of their income bracket mainly to show off to friends—Why, hello, Bill. Would you like a little bit of this brie? Contrary to common sense, the landscape has changed from simply the well-educated foodie, but now it encompasses your average college kid with mom and dad’s expendable income!

This is just yet another example of why it is so important to look at your marketing landscape with more than just assumptions and gumption. There must be more than just a “spaghetti” tactic—an idea we just throw at the wall of consumers and hope sticks to something. Though it is a rudimentary idea, I see so many tv spots, tag lines, etc. that either clients or agencies assume who the audience is, what they want, and how they want it all because that’s how they’ve always done it! Well, let the specialty food industry be an example of how far off target an assumption can be—and how many marketing dollars will be completely wasted.

The video below illustrates just one key component of why it is so hard to do business these days. Basically, the lighter the color of the U.S. of A., the better off we are, the darker, the worse.

Although the “end” date of this downward spiral is a moving target, and one of great debate, if history is any teacher this is a cycle that will turn around. When it does, a generation of Americans who have been forced out of the market for all sorts of creature comforts, or forced to trade down from their preferred brand due to budget constraints, will be ready to spend again.

What should you be doing to build/preserve your premium brand?

• Fish where the fish are today. – Sell where people can buy. Don’t sell where people can’t buy.
• Don’t ignore your legacy customers. – When things turn around, they will be the first to spend again. Do NOT make them feel like you only care about them for their money. Doesn’t work for most relationships, and this is no different.
• Don’t stop promoting. – You have competitors that have cut marketing budgets to preserve margins. This is especially true in public companies that are under intense pressure to hit earnings targets. Take advantage of that to build the perception of your brand as premium in the absence of competition for share of voice.
• Don’t sacrifice your brand quality. – Just because the competition is going down to the 10 oz. box, doesn’t mean you have to. Unless, of course, you REALLY have to. Continue to provide as high a quality product as you can for as long as possible. And when things pick up, you’ll have a reputation of premium quality even through the tough times to fall back on.

Take these principles, apply them, and see what a difference it makes to customer loyalty, brand perception and overall brand equity. Though right now, those valuable assets may seem useless to turn a profit, your brand will be the outlier in the category. These moments of heat are the ones that define your brand’s legacy. Be the bold brand. Be the rebel. Be the premium brand that thrives in tough times, instead of struggling to merely survive.

Last night, while watching my recording of Wednesday’s So You Think You Can Dance (yes, I’m one of those people), the show’s host introduced me to a group called “The Legion of Extraordinary Dancers.” While this seems like a fun name, I was hardly going to believe what a TV show produced by American Idol aficionado Nigel Lythgoe told me. Like any consumer, I had to consider the source.

But as the music began and I saw the opening moments of the performance, there was an immediate sense of pride in making the right decision to stick with the program. The time and effort put into each execution. The attention to detail! They were fantastic. Beyond excellent. They were extraordinary. And I proceeded to go online and watch the YouTube version of the performance below 5 more times that night. And then a few more today.

There were other performers on the show who were great. It’s a dance competition, for heaven’s sake! But these performers stood out because they have created this product, this “brand,” with creativity, something distinguishable, something unique, and, hopefully not to be too trite, something premium. And not every brand can play at this level, but when articulated and executed well, the consumer is hooked. And living up to your claims defines consumer retention.

So, brand managers, before settling with any creative or strategic execution, ask yourself a few things—what is it about your brand that is truly extraordinary? What is it that your product does within its category that is beyond normal? And how can you tell that story in a like fashion? Articulate and demonstrate these assets, and your customers will develop a sense of pride and belief in your brand, as well. And though it may seem basic, it works. Trust us. We at WD create such extraordinary every day.

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?

The most important restrictions are the prohibition of:

• Photo contests which require profile photo manipulation
• Status update contests which require posting status updates for entry
• Contest entries once a user has become a fan
• Promotions appearing anywhere but in an application on a tab within the respective Fan Page

Even worse, every promotion must be approved by Facebook through an account representative and have a listed disclaimer!

So, with these new limitations, what is a brand to do? At the risk of seeming arrogant, I have to point out that premium brands must now stop the insistence that they can handle their own Fan Pages and social media. They must turn it over to someone who can develop apps, has a standing relationship with account reps, as well as have the strategic thinking behind how in the world to get users to care about a Widget Deluxe Fan Page when they get nothing free from it. In plain English, they need a marketing agency.

Not to toot my own horn or do the sales pitch, but in past posts, we’ve pointed out how it is virtually impossible for a one-man-band to handle a full social media strategy—emphasis on strategy. So, throw in creative web application development on top of legalese, and it’s way over what Jimmy the 18-year-old intern can handle on his own. And while this may seem discouraging to brands that have relied on this “cheap” form of social media connection, I must remind us all that in marketing, we get what we pay for.

So, Facebook has, in essence, secured the need for a well-thought-out plan of attack and I applaud them for taking such measures to keep their product premium and free of spam-inducing promotions popping up on their highly-successful product. Though it might be hard at first for premium brands to part with their dollars to produce a new way of reaching Fans on their Page, it really is long overdue if they want any chance of retaining their premium status on Facebook.

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.

But does it have everything else a premium brand needs to truly act premium?

Premium brands behave differently than ordinary brands. Their packaging or labeling stands out in creative ways. The materials used to create the packaging are an appropriate type and of good quality. And the marketing and advertising materials used to promote premium brands are always professional, and usually, creative.

Perhaps more importantly, premium brands act premium when few people are looking. When a customer calls a 1-800 number of the brand, they’re treated cordially and  professionally.  If the brand has a brick and mortar presence, their customer service is polished and top notch. And if the brand experiences a quality or performance problem, a favorable solution is offered quickly and politely.

Yes, being a premium brand certainly has its benefits.  It just takes  special effort to always act like it.