Premium Brand Development: A Framework for Business Leaders

This post is for CEOs, CMOS, and marketing directors who want to learn how premium brand development can help a business create market differentiation.

POST UPDATED:

March 2, 2024

premium brand development

Businesses often assume that gaining market share requires competitive pricing or an eye-catching feature list. However, premium brands prove this wrong. These companies command higher prices and drive substantial revenue growth by focusing on superior value and the intangible allure of prestige.

As one example, Casamigos, founded by actor George Clooney and his business partners, established itself as an ultra-premium tequila from day one. Their strategy paid off, fueling sales volume growth of over 82 percent each year for nine years before Clooney and his team sold the company in 2017.

In this post, we will explore premium brand development and a framework you can use to decide if the strategy is right for your business.

Table of Contents

    What is a premium brand?

    A premium brand is an individual, company, product, or service generally perceived to have exceptional value in the target market's mind.

    Understanding the premium advantage: Why customers pay more

    While higher prices are a primary characteristic of its identity, a combination of tangible and intangible factors are needed to build a premium brand:

    Superior value: More than a high-quality product

    Premium brands have a relentless commitment to innovation. These brands never stop seeking the finest materials and methods to create newer, more sustainable, or functionally superior options.

    High-value brands foster a culture of experimentation, encouraging calculated risks with emerging technologies or design trends while maintaining their distinct brand DNA and delivering the value their customers expect. This dynamic approach to innovation enables premium brands to offer products and experiences that thrive in today's marketplace while redefining industry standards for the future.

    Customer-Centric Strategies Driving Business Excellence with Segmentation (Click to expand)

    Exclusivity: The power of scarcity and desire

    Premium brands cultivate a sense of exclusivity, whether through limited editions, curated product lines, or personalization. This scarcity fuels desire, making customers feel like they possess something rare and highly sought-after.

    The psychology of premium: Emotional connection in a digital age

    Customers often yearn for a heightened sense of self. They may seek social validation, a feeling of belonging to an elite community, or the satisfaction of achieving a personal goal. Premium brands become symbols of these aspirations, which enables them to create a connection beyond the product.

    Maintaining this connection in the digital age requires both artistry and agility. This involves offering limited-access online communities, personalized offers, and compelling digital storytelling highlighting heritage, craftsmanship, and brand ideals. Premium brands embrace a test-and-learn culture and leverage data to understand how their audience responds to digital campaigns and experiences.

    Aspirational brands also create online spaces that evoke the same emotions felt in a high-end physical store. For example, Italic, a lesser-known premium brand, creates an exclusive online experience through a membership model, limited inventory, and storytelling. The company highlights the same manufacturers and craftsmanship found in top-tier luxury brands. This strategy, paired with a minimalist website design, positions Italic as an "insider's secret," promoting a sense of exclusivity despite lacking the traditional labels associated with luxury goods.

    Pillars of brand positioning

    Accessible exclusivity: The key to expanding your premium reach

    Premium brands often walk a fine line to cultivate an aura of exclusivity while maximizing their customer base. The concept of accessible exclusivity offers a strategic solution. This technique balances the desire for exclusivity with the need for growth. Companies can significantly increase sales without diluting the brand's appeal by pricing certain entry-level products or experiences to make them slightly more attainable for the aspirational customer.

    How to execute accessible exclusivity:

    • Tiered offerings: Create a range of products or service levels with distinct price points. The most premium offerings maintain a high barrier to entry, while lower-tier items offer an attainable "taste" of the brand experience.
    • Limited editions: Offer memorable product lines or collaborations with more accessible price points for a limited time.
    • Targeted promotions: Carefully consider discounts or introductory offers. They should be selective and designed to entice new customers into your brand ecosystem without cheapening the company's overall perception.
    • The power of storytelling: Emphasize craftsmanship, heritage, and business ideals even in your "accessible" offerings.

    Successfully executing this strategy requires understanding your target market's aspirations and consistently focusing on quality and brand experience—even for an entry-level offering.

    The Customer Experience Process (Click to expand)

    Is premium right for you? A critical self-assessment

    Transitioning to a premium brand strategy requires a thorough understanding of your business's capabilities, market positioning, and target audience. Here are some key questions to guide your self-assessment:

    The product or service: The foundation of premium

    Can you honestly claim that your product or service offers something unique and superior? Are you committed to the investment in quality, innovation, and the details that elevate an offering beyond the ordinary? Most of all, can you prove it?

    Target market: Identifying the premium buyer

    Is there a clearly defined customer segment that values the quality and experience you intend to provide? Are they willing to pay more for it? Carefully research each market segment, including their spending habits and what drives their buying decisions.

    Brand perception: Building on your reputation

    Does your company's current reputation align with the values of a premium brand? If customers associate you with affordability or mass-market appeal, transitioning to premium may demand significant rebranding efforts.

    Customer experience: The premium promise

    Are you prepared to deliver an exceptional customer experience at every single touchpoint? This goes beyond friendly service. Companies must anticipate needs, offer personalized attention, and continue to enhance the brand's value throughout the customer journey.

    Pricing Positioning Strategy (Click to expand)

    Success story: Dyson

    Dyson represents a triumph of premium positioning within a traditionally utilitarian market. Household appliances rarely stir excitement, but Dyson has become a well-known name in its industry. Here's how they exemplify successful premium brand development:

    Innovation as a core value: Dyson relentlessly invests in R&D, continuously pushing the boundaries of technology. Their products offer functional superiority and visually striking design, from bagless vacuums to bladeless fans.

    Design that excites: Dyson products are instantly recognizable, with bold colors and futuristic forms. They become statement pieces within the home rather than tools to be hidden away.

    The power of storytelling: Dyson emphasizes its engineering prowess, highlighting patented technologies and rigorous testing. This reinforces their value proposition of unparalleled performance.

    Customer experience beyond the product: Dyson's direct-to-consumer model and focus on expert support online and in-store reinforces the feeling of exclusivity and personalized attention.

    Premium pricing: Dyson products are significantly more expensive than competitors. Yet, their value proposition of innovation, design, and lasting performance justifies the investment for their loyal customer base.

    Brand Audit
    Brand Audit

    Building Your Premium Foundation: A Strategic Starting Point

    In this section, I'll share foundational steps you can use to unlock the customer loyalty and sustained growth that comes from premium brand development.

    Begin with a comprehensive target audience analysis to understand your ideal customer on multiple levels. Analyze their demographics, pain points, desires, and the emotional triggers that turn a purchase into an expression of self. Simultaneously, focus on product excellence by investing in quality materials, craftsmanship, and innovation that surpass expectations. A premium visual presentation in the form of design and packaging conveys a sense of luxury is also essential.

    Many companies find it helpful to conduct a brand audit to assess their readiness for a premium brand transition. An audit includes an analysis of messaging, visual identity, product quality, and current customer perception.

    Storytelling is another critical piece of the premium puzzle. Does your brand story emphasize quality or affordability? Identify strengths, opportunities, and inconsistencies that might weaken premium positioning. Even traditionally utilitarian industries can achieve premium status. As Dyson demonstrates, relentless innovation and a focus on customer experience can transform a brand's potential.

    A brand audit also presents the opportunity to analyze successful premium brands within your sector and adjacent ones. The process examines product design, customer service, pricing, and storytelling to establish the benchmarks you must exceed.

    A premium strategy isn't a one-time fix. Use market research tools, surveys, and ongoing data analysis to adapt your offerings and customer experience as the landscape shifts. Train your team to provide exceptional, personalized service that anticipates customer needs, making them feel valued at every touchpoint.

    Types of KPIs (Click to expand)

    Premium brand development: Data-driven strategies to boost your metrics

    Premium brands understand that exclusivity and emotional appeal must translate into tangible business success. Here's how to leverage your premium strategy to strengthen key metrics:

    Customer lifetime value (CLV)

    Actions you can take to improve CLV:

    • Emphasize lasting quality: Invest in materials, craftsmanship, and durability. This encourages repeat purchases as customers trust your products to stand the test of time.
    • Reward loyalty: Implement exclusive loyalty programs with tiered benefits that incentivize repeat business from your most valuable customers.
    • Personalized experiences: From specific recommendations to customized product options, make each customer feel valued and understood, increasing their lifetime engagement.

    Brand equity

    Actions to increase brand equity:

    • Consistent, compelling storytelling: Highlight craftsmanship, heritage, and values across all channels. Reinforce the reasons customers should feel something special when associating with your brand.
    • Strategic partnerships: Collaborations with other respected companies in adjacent markets can elevate your brand perception by association.
    • Limit discounting: Maintain price integrity. Excessive sales can signal a lack of confidence in your business's worth and diminish brand equity.

    Referral rates

    Actions to improve referrals:

    • Offer exceptional experiences: Go above and beyond in quality and customer service to make your brand stand out, turning customers into enthusiastic advocates.
    • Leverage social proof: Feature customer testimonials and user-generated content celebrating experiences with your brand.
    • Incentivize sharing: Implement referral programs that reward customers for bringing in new business, offering rewards that align with your premium positioning.

    Important Note: Measuring the success of these actions requires consistently tracking your CLV, brand equity, and referral rates. Complex metrics like these may call for specialized tools and methodologies. The Brand Auditors can help you establish a measurement system and strategic benchmarks.

    Are you ready to elevate your brand?

    Unlock the competitive advantage of premium branding. The Brand Auditors offer data-driven insights and actionable strategies to propel your business to the forefront of your industry. Contact us today for a personalized consultation.

    Brand Strategist | Managing Director

    Chris has over 15 years of experience in brand development and marketing. He has designed strategies across various industries, such as technology, B2B services, and healthcare. His areas of expertise include brand positioning, competitive analysis, content marketing, and web development.

    Are you ready to find out how a brand audit can transform your business?

    Our brand audit process is a comprehensive analysis designed to help companies optimize performance.

    • Increase ROI on lead generation and sales conversions.
    • Reduce marketing expenses.
    • Strengthen brand positioning to become more competitive.

    We guarantee satisfaction or get your money back! Schedule a discovery call with a brand auditor to find out more.

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