Author: Josep Alzamora
Reflection on Prestige
Challenging Environment
Companies have an increasingly severe problem with their sales processes. They find it increasingly challenging to generate continuous and profitable growth, i.e., with a sufficient commercial margin to generate double-digit profits. Moreover, when faced with a major crisis, it seems justified or inevitable that their income and profit volume will be substantially affected.
The recipe usually used is, first of all, intensive advertising-based marketing, proving to be progressively inefficient. The media is oversaturated with advertisements that promise things consumers don't believe. This fact severely affects brands' ability to sell.
More recently, the focus has been placed on the massive use of online sales, which only works in some cases because digital platforms are just a tool, a channel, but not the main reason for customers to purchase. Of course, they are necessary but not sufficient per se for commercial success.
Consequently, companies need a sufficiently powerful alternative to function effectively in a hypercompetitive environment.
The Wake of Success
Suppose we study the case of companies that have been successful for many generations and have prosperously gone through all kinds of crises and adverse situations. In that case, we can find a common pattern.
Regardless of aspects that may be more or less striking, the business model of successful companies in the very long term is the same: their sole focus is to become and remain a market reference. They also have in common the fact that none of them started out as such. On the contrary, they all had to follow a demanding and complex path to become the benchmark in their respective markets. Of course, all the brands of reference use excellent digital platforms, the same way they have excellent physical points of sale. However, none of them use advertising as a sales tool. But why is that?
Following the “flavor of the month,” companies hardly find powerful answers to their most critical problems.
The term "advertising" must be understood in this reflection as "telling people to buy a product," which must be differentiated from communicating a product's properties without asking to buy it
Bonding Requires Freedom
All brands that are a benchmark in the market are so because they become the consumers' preference. The emotional bonds that turn the brand into a preference are built during this process. However, this bonding would not exist if the brand asked people to buy its product. On the contrary, as they are preferred because of the degree of satisfaction they generate, the customers recommend them. It is a business model based on prestige. Precisely, the bonds forged between the brand and its customers based on those two premises (extreme satisfaction and freedom of choice) are the key to enabling a company to weather severe crises better than others.
At this point, we can ask ourselves: Why aren't there more prestigious brands if this is the solution?
A brand is prestigious when is able to generate such a level of satisfaction that it is the customers themselves who recommend it.
No Shortcuts
Preferences, satisfaction, and emotional bonds, among many others, belong to the universe of affective phenomena, to the emotional plane of our lives. Consequently, they are governed by the laws of emotional energy.
The first of these rules is that everything related to emotions works through perception. Therefore, since our senses only perceive what is "actually there," they reject inconsistencies and misleading messages. In other words, prestige requires authenticity and honesty. Total quality and excellent service are taken for granted. Achieving an increasingly high degree of customer satisfaction requires much more.
But how can a company generate a high degree of satisfaction by being authentic and honest?
Expectations
The first step in generating a high level of customer satisfaction is to understand the difference between needs and expectations (see Figure 1: Emotional Perception Scale).
Once we understand the need to work with expectations and not only with needs, we face the real challenge. Expectations are rarely made explicit. Contrary to needs, which are everything that the customer expresses (rationally), expectations are what the customer really wants but does not make explicit.
This is where the real difficulty of generating prestige lies, in the fact that we do not have the tools to know what is not made explicit in a systemic way.
Nowadays, there is a way to know customer expectations through metadata extracted from the digital footprint, especially Internet searches. However, most businesses cannot afford the cost of accessing this data, much less if they want to know the expectations of their customers. Therefore, it is necessary to develop a set of methods and tools, perhaps a comprehensive methodology, that allows us to understand customers' expectations and turn them into an offer capable of generating high satisfaction.
Figure 1: Emotional Perception Scale