What Is a Premium Brand?
A combination of high quality and exceptional value puts elite brands in a category of their own.
Have you ever bought something simply because of how it made you feel?
I’ll admit, I have.
Ray-Ban sunglasses are an example.
I’m not sure what it was about Ray-Ban that first got my attention. Maybe those publicity shots of Dean Martin sporting a pair of Wayfarers throughout the 1950s had something to do with it. Or it could have been when the Blues Brothers made them part of their trademark look in 1980, or when Tom Cruise made Aviators famous six years later.
It doesn’t matter. I’m a lifer and I like them not for one reason, but for several. Most of all, I like the way I feel when I wear them. Now, I know wearing a pair of Ray-Bans won’t make me look like Dean Martin or Tom Cruise, but…
What I have just described to you—my affinity for Ray-Bans—is the essence of the premium brand.
But how do certain products and services actually make us feel something when we buy them?
And what can you learn from these premium brands that will help you set your business apart?
In this article, you will learn:
- what a premium brand is
- the secret behind premium products and services that makes us want them
- three layers of benefits premium brands offer
- how to turn your business into a premium brand
What Makes a Brand “Premium”?
Defining what a premium brand is can be difficult because it really depends on who you ask. Each individual has his or her own set of values and priorities. What matters to one person, may not matter to another.
A premium brand is an individual, company, product, or service that is generally perceived as having an elevated status, unique quality, or exceptional value in the eyes of its target market.
In other words, premium brands have the It Factor.
Premium brands offer a combination of supreme quality, value, purpose, and exceptional experience.
When asked, most people associate a premium brand with a higher price. But price is not the only characteristic that makes a brand “premium”.
Here are some others:
- they outsell competitors on a per-unit basis (sales volume)
- higher customer satisfaction ratings (i.e., 5-star reviews)
- higher customer retention rates and repeat buyers
- a customer base that does the selling for them (also called brand advocacy)
Overall, premium brands share specific characteristics and traits that make them appear superior. Since it can be tricky to articulate exactly what a premium brand is, I’ll use an example to illustrate.
In the United States, water is a commodity. (Sadly, this isn’t the case everywhere.)
Almost anyone in America can walk over to the kitchen sink, turn on the faucet, and get their fill. Yet the demand for premium H2O continues to grow in the United States and abroad.
When they first came to market, premium water brands claimed bottled water was safer to drink. But no one could agree. So, rather than advertise “safety” as a reason to buy, premium water brands discovered and promoted other unique benefits.
Convenience became a primary selling point. For instance, bottled water is easier to carry and store. Place of origin has become another popular quality marker for bottled water. There’s a theory that water harvested from certain locations is cleaner and tastes better. Of course, there’s no way to prove—or disprove—this theory.
Premium water brands found yet another way to enhance their value. Through market research, they discovered that a specific segment would pay more for certain health benefits. Premium water brands then claimed their product provided those benefits and targeted the market segment that wanted them.
The irony of it all?
Most people didn’t know what the health benefits of premium water were until the water brands told them. At that point, bottled water became much more than just water—it became something worth paying more to acquire.
Believe it or not, a company produces bottled water that sells for as little as $285 and another for as much as $60,000.
I doubt either of us will be paying three hundred dollars for a bottle of water any time soon. But it’s likely we’ve both paid a few bucks for one at a local convenience store.
Why We’ll Pay More for Premium Brands
Looking back over this example, we can see premium water brands became successful by:
- promoting certain benefit claims valued by a specific target audience
- making claims of product superiority while providing evidence to support those claims
- demonstrating how their water harvesting process is superior to others
- educating consumers on how to compare bottled water brands by promoting their own brand as the standard for comparison
These companies also did something many of us would think impossible—they sold water at a premium to an audience that has plenty of water.
They tapped into their audience’s innate desire to be smart and healthy. It’s also likely that status played a role as well. Starbucks has followed a similar model using coffee.
Premium brands position their products or services in a way that makes them more valuable to their target audience. People want to feel smart, desired, even envied, by others.
If a product or service can help them experience these feelings, they will value it more—and pay more for it.
Attributes of a Premium Brand
For a brand to become “premium”, it must possess certain characteristics that make it superior in the eyes of the target market.
Let’s look at each one.
Quality itself is subjective. People don’t always agree on what defines it. So, it isn’t enough for premium brands to make claims of superiority, they must prove it somehow.
Most consumers assess the quality of a physical product based on its performance, exceptional features, and reliability. This includes better ingredients, materials, and innovative manufacturing processes.
For service industries, assessing quality is much different process. Expertise is the primary quality marker for service providers.
If people believe you’re the best at what you do, they’re more likely to pay your price. Service providers can demonstrate their expertise through content, such as blogs, books, and courses. For them, building authority, while time consuming, is an effective way to earn their audience’s trust.
Price as an Indicator of Quality
It’s ironic that consumers use price as an indicator of quality. In their minds, there’s a correlation between the quality of a product or service and its price. Likewise, if the price doesn’t align with their perception of its quality, they’ll consider the item or service “too expensive” or “not worth what you pay”.
For example, the price of a new Mercedes S-Class Sedan is around $94,000. But if someone offered to sell you a new one for $30,000, you’d be inclined to think it was stolen. It makes no sense that you could buy a new Mercedes Sedan for less than half its market price.
The psychology here is that if it’s too good to be true, it probably is.
We all want the biggest bang for our buck. This is the best way I know to describe value.
To charge more, customers must believe the value they’re getting exceeds what they pay. But like quality, value is often debatable.
For example, one person may buy a car for its safety features. Another may buy it because it’s made in America. Both people bought the same car, but they value it for different reasons.
Many businesses assume they know why customers value their products and services. But be careful making presumptions about your audience. Instead, talk to your customers and let them tell you how they define value as it pertains to your industry.
Premium brands invest time and resources to understand what their customers want and expect. Then, they use this information to deliver many types of benefits, not just a few.
The Premium Brand Trifecta
The one area that truly separates most brands from premium brands is benefits. Many companies, and even individual consultants and freelancers, struggle to articulate exactly why should buy from them instead of a competitor.
Businesses focus on the most obvious reasons to buy, such as “we take care of our customers” and “we’re good at what we do”.
But those won’t go far in convincing anyone, even if they appear to.
Premium brands dig a little deeper and aim to deliver three specific types of benefits: functional, technical, and emotional.
Functional benefits refer to a product’s or service’s ability to meet a need. For example, a car’s function is to get someone from one place to another. An accountant’s function is to help people file their taxes.
Technical benefits relate to features and performance. These benefits show customers why one choice is better than another. This includes consistent delivery, without errors, glitches, or other issues.
A good way to communicate technical benefits is to educate your audience on what matters in your industry. Remember the water brands in the section above? They helped their target market understand what the technical benefits of bottled water were and why they should care.
This also builds your authority.
Finally, premium brands deliver emotional benefits. Emotion is the driving force behind purchasing decisions, not logic. People buy the transformation that your product or service will help them make.
As you build emotional benefits, try to deliver them over the short- and long-term. Total transformations can take a long time and most people won’t be willing to wait. If they think it will take too long to achieve the transformation, they may not buy.
Delivering a short-term benefit will reinforce their decision to move forward. This time frame could be days or weeks but should be no more than a few months.
Premium Brands Are on a Mission
Most businesses have a “mission and vision” on their website but few know how to create a narrative around it. Developing a brand story is a powerful way to connect with your target audience.
Most business owners keep their passion and vision to themselves. And it’s true that customers are more interested in what you can do for them than your business’s mission—at first.
While they may not necessarily care about why you’re in business, they care about your business’s why. Recent research shows that people are at least four times more likely to buy from mission-driven companies.
Purpose-driven businesses are powerful and premium brands keep theirs at the center of all they do.
To help with this, find a connection between what your customers want and your business’s mission. Then, create a brand story (or narrative) that makes your customers part of the journey.
A brand narrative is on-going. Use it to share experiences that will build interest in your business. Tell your audience about innovative processes you’ve developed and share customer successes.
It’s also fine to let them in on the challenges you face and how you’re overcoming them. This is great way to let them see that you’re human too. Often, they’ll rally around you as you fight the good fight.
Premium Brands Create a Memorable Experience
Brand experience is defined as sensations, feelings, cognitions, and behavioral responses evoked by brand-related stimuli that are part of a brand’s identity, packaging, communications, and environments.
In other words, it’s what people feel before, during, and after the sale.
For many businesses, the relationship with the customer starts with the sale. But premium brands begin the process much sooner, long before a buying decision is ever made.
They use multiple touch points to communicate with customers in each phase of the buying journey. The goal is to lead them through the customer evolution process, which never ends.
Exceeding customer expectations is also part of the brand experience. Everyone makes promises—only a few actually follow through. Premium brands create an experience based on what their customers really want and they deliver it consistently.
Premium Brands Are Different
Premium brands don’t happen by accident. They have the desire, boldness, and discipline to stand apart from the crowd. Most of all, they have a plan.
It’s possible for any small business to become a premium brand.
That’s true for yours as well.
Do you want to attract customers who appreciate the value you offer and increase profit?
Contact me personally at email@example.com.
Until next time,
We equip visionary entrepreneurs and small business owners with the knowledge and resources they need to stand out, communicate their value, and make more profit.