“Thought Leading” Your Way to Premium Brand Status
They’re called by different names such as premium brands, luxury brands or even high-road brands. Regardless of the name, the value of attaining premium status in your industry comes with high rewards and the greatest return on sales (ROS) or in the industry. Moreover, as you attain premium status, you jettison the need to ‘push’ ceaseless messaging and advertising and tip of field of gravitational pull in your favor by becoming a ‘pull brand’ that attracts the right customers with less effort. That said, not every brand can be a premium or high-road brand. For those brands seeking that status, however, I submit that pursuing a thought leadership marketing strategy is one path toward premium status. Let’s have a look at some of the characteristics of premium brands and how they correlate with thought leadership marketing. What is a premium brand? Premium brands are those that typically lead their category through innovation, innovation and more innovation. They also tend to earn more than 20% ROS (according to a Harvard Business Review article from 1997) while non-premium brands earn as little as 5% return on sales. Clearly there are financial advantages to being a premium brand. The consumers of premium brands also tend to be very loyal, willing to pay the premium price and continue to seek innovation (or tradition – the other side of the innovation coin in premium brands). While you may jump to BMW’s and Tumi luggage when you think of premium brands, let’s set our sights a bit lower. Kraft Macaroni and cheese is a great example of a ‘premium’ brand that has consistently outperformed competitors and store brands alike through constant innovation. Premium brands come in all shapes and sizes. Characteristics of premium brands When brands reach premium status, they typically exhibit a series of common characteristics:
Certainly there are other attributes that we could use to describe premium brands. However, these give us a reliable proxy for understanding what a premium service or product brand should look like. Where does thought leadership fit in? Thought leaders offer their market a unique and authentic value based on a differentiated point of view. Thought leaders are unique in their market position in that they are often the companies with the most profitable ongoing relationships with their clients and the industry that they serve. If we take a cross section of brands that practice thought leadership marketing, we’ll soon find that they have many of the same characteristics that are often attributed to premium brands. McKinsey consulting commands a premium for its services, Cisco extracts a higher return on sales than is peers in part due to its thought leadership in the computer networking market and everyone from vegetable distributors to startup internet companies command impressive returns by delivering tangible use value by producing thought leading content for their market than their downmarket peers. Thought leaders, like premium brands, cannot go to market without something unique, innovative, authentic and valuable to offer. Moreover, just like premium brands have shown us the way on how define the best in a category, thought leaders use their passion and penchant for market stewardship and education to show us ‘how it’s really done’ by their industry leading standard. Exploring the characteristics of premium thought leaders You’ll see that we can begin to establish premium brand status for our organization by applying the same criteria from premium brands to our thought leadership marketing go-to-market strategy:
If premium brand status is your destination. There are a few tried and true paths to get there. However, I submit that for business-to-business marketers, professional service firms, non-profits and nascent startups they path of the thought leader is the way to go en route to premium brand land.
