EPISODE 123 OF THE MARKETING SOLUTIONS PODCAST: POSITIONING AS PREMIUM IN A CUT PRICE INDUSTRY

Sonya:

My podcast on discounts and promotions last month generated some really interesting discussion within my community of fellow business owners.

The general consensus was that, while many of them knew INTELLECTUALLY that discounting doesn’t contribute long-term to their brand, they either didn’t know how to STOP relying on promotions.

OR, they didn’t know how to position their brand as premium, now that the expectation for discounts and special offers had been set.

And while these are TOTALLY valid concerns, they’re NOT insurmountable problems.

As I said in Episode 118, YOU get to set your prices. YOU get to say what your value is. And YOU can change your mind, one way or the other, whenever you like.

Keep listening to learn how.


(INTRO)


In the work we do at Linchpin, we see a TON of business owners who made some big business decisions when they first started their business, or in response to Covid.

And now, years later, they feel like they can’t go back on decisions they made when their business was in a completely different place.

Ideally, they would be positioned as premium from the get-go, BUT...
If Taylor Swift can go from country starlet to rock goddess to indie folk dreamgirl, you can go from middle-of-the-road to premium positioning.

You didn’t think I’d go more than a few episodes without a Taylor Swift reference, did you?

Here’s the thing.
You can’t be two things at once.

You can be premium, or you can be cheap. You can’t be both.
At some stage, you’re going to have to choose between premium and price positioning.

And it’s not a decision you should make lightly, either.
That choice will affect not only your pricing strategy, but your image, your target market and your competitive advantage.

Since this affects service-based businesses the most, I’m going to be talking to the beauty therapists, gym owners, trades, and professional services such as accountants and business advisors in this episode.

If you’re a product-based or ecommerce business owner, you’re still going to get value from this episode, but if you want me to cover premium positioning as it relates to your business type in a later episode, let me know! I’m happy to accommodate.

But for now, service-based businesses, listen up.

NOTHING will positively affect the bottom line of your business more than premium positioning.

Let’s define what that means.

To put it simply, premium positioning sets you apart from your competition.
It says to the market that you’re superior, in terms of service, results, quality and exclusivity.
You don’t discount, because you don’t HAVE to. If you do discount, it comes from a place of generosity, not from a place of desperation.

Your clients are willing to pay more for your services, because you’re worth it.
You’re not a one-size-fits all, you have specific client avatars who you speak to directly.

Premium brands typically cost more and have higher profit margins.
The benefits, features and status associated with the brand are all clearly communicated, and while your client pool may be smaller, they’re generally MUCH more loyal than the clients of brands that rely on value positioning.

Premium brands FEEL expensive.

Think about the quiet luxury fashion trend that’s everywhere at the moment:
It’s not loud in terms of colours and logos. The lines and textures are soft and luxurious.
It’s timeless, in a way that fast fashion could never be.

In a world of fast fashion service providers, being the quiet luxury brand is a solid business strategy.


If you’re currently stuck in discount land, and want to pivot to premium, there are 6 areas of your business you need to look at:

Pricing
Brand identity
Online presence
Quality
Point of Difference, and
Your offering

Ready? Let’s go.

First up: Pricing
Buyer psychology dictates that a more expensive brand is perceived as higher quality - even if that’s not the case.

Do a bit of research on your competitors to see where you sit in the market. You don’t have to be the most expensive if that makes you feel uncomfortable, or if your clients simply can’t afford it, but you also don’t have to run monthly discounts and special offers, either.

As I said in Episode 118, when you constantly discount your offers, that discounted price becomes what your clients think you’re worth.

If you don’t want to be perceived as 20% cheaper than your standard price, don’t ever offer that discount, it’s as simple as that!

When raising your prices, pick a date, let your existing clients know ahead of time, and give it a good six months at that new price before you make any further pricing decisions.

When you stretch yourself on pricing, it can feel uncomfortable. Here’s where you have a choice: you can snap back into your comfort zone, like a rubber band after it’s been stretched, or you can sit with the discomfort until you get used to your new, expanded comfort zone.

If you’re going to position as premium, there are going to be people who just can’t afford you anymore.

And that’s ok!

You can refer those people on to other service providers who fit within their budget. 

A hairdresser in my local area did this beautifully, post-Covid.

They’d been undercharging for YEARS, in my opinion, and when it was time to raise their prices, their new prices were significantly more expensive.

They knew that some of their clients would look elsewhere, so they did something surprising: they rang around, spoke to cheaper salon owners to see who had capacity for new clients, and they created a flyer with their new pricing on one side, and on the other side there was a note:

“We know that the cost of living has affected all our clients, and we understand you may need to find a more cost effective alternative, for now. We wholeheartedly recommend these salons, who are currently accepting new clients, and we’d love to welcome you back in the future.”

Talk about a beautiful way to set boundaries, while still being kind, supportive, and generous.
It was a classy move, which positioned that salon as a classy brand even more.

Moving on now, to Brand identity
Your brand identity speaks volumes about your premium positioning - or lack thereof.
And it comes down to two things: design, and consistency.

If you DIY your branding on Canva, you’re not going to benefit from the skills a professional designer can offer.

These are things like colour theory, balance, spacing, and buyer psychology - and they’re things a good designer will take into consideration when creating your brand identity.

And it’s not just about your logo!

You want consistency across the board, from the shade of blue to the font type and size. It ALL matters.

And in the same vein, your online presence is VITALLY important when it comes to positioning as premium.

Your website shouldn’t just look sleek and chic - it needs to do what you need it to!
User experience is an essential part of your brand experience.

Your site should be easy to navigate and load quickly.
Booking appointments should be easy.
Information should be clear and concise.

You can’t have a premium brand with a clunky, cobbled together website. It’s worth the investment to work with a professional web designer.

It’s important to consider your social media, too. 

Premium brands don’t point and dance on TikTok.
Premium brands don’t use whatever Canva template popped up first when they wanted to create a graphic.
Premium brands use premium, professionally designed graphics, and they don’t post for the sake of posting. 

A restrained, well-considered strategy will win the day, every time.
Work with a designer or an agency, if you have the budget. It’s well worth it. 

Moving on now, to quality.

If you want to be premium, you must be exceptional.
If you’re not exceptional, you’re not premium - you’re overpriced.

Just like a house needs a strong foundation to last the test of time, so too does your business. 

And a premium business is classy, in every aspect. 

Examine every detail of what you do. And I do mean every detail.

If you’re not proud of every touchpoint, from the way you answer the phone, to the quality of the products you use and the service you provide, and even the manner you follow up in, then you have work to do.

And then there’s your Point of difference

You can’t wake up one day and decide to double your prices, while offering the same service as your lower-priced competitors... Well, you can, but it won’t be long until people realise they can get the same thing elsewhere for less money!

Your Unique Selling Point, or USP, is what sets you apart from the competition.

You may be the exclusive distributor of a product in your local area, or exclusively use another premium brand in your services. This is common in the beauty industry, and it works.

Your physical premises might be unique, creating a premium experience.

Or you might offer those “one percenters” - the things that 99% of businesses in your industry DON’T do, that add to the experience. 

USPs are the VIP when it comes to premium positioning.

Finally, your offering.

It’s ALWAYS better to do less, but better.

When you go to a restaurant that has a menu that looks more like a phone book, it doesn’t inspire much confidence about the quality of the food.

Premium restaurants, on the other hand, have a one page menu, or even a set menu!
They don’t have 17 red wines, they have four or five.

Less choice means more opportunity to specialise in specific things.
You can’t do it all, and do it well.

And once you’ve mastered these 6 things? 

You maintain your new, higher standard.

You embrace consistency, and you embrace mastery.

you do less, but better.

You don’t panic that your new prices are unattainable.

You breathe through it, and you trust that the market will adapt.

You give yourself six months at this new level - and then you assess what has worked, and what hasn’t.

And if you’re REALLY brave?
You level up again. 

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