So I was talking at event recently about ‘loyalty’ and mentioned how when the Amazon Dash button came out, one of my clients was ecstatic.
In their mind, it meant they were going to see sales grow because instead of having to risk a shopper buying a competitive brand, they would press the button and the sale would be there’s guaranteed.
In my talk, I went on to say how I told the client that was great in theory, but there were 3 things they had to think about.
1. The real winner is always going to be Amazon.
2. It was going to be a huge race to see who could get the most ‘buttons’ into homes.
3. The result would be the destruction of their hardly fought – and expensively bought – premium brand value status.
At the end, a gentleman asked me why I thought turning a brand into a commodity was a bad idea as it meant more sales and that meant more money for the brand and the shareholders.
I must admit, I was quite taken aback by this response and pointed out that being a commodity might generate more sales, but it loses profitability and – more scarily – leaves you open to a competitor deciding to either launch a price war or disrupt the market with a new product.
He wasn’t convinced and kept going on about commodity value and how soon all brands will end up following that route.
I must admit I was a bit rude to him so after the event, I sought him out to have a chat.
Turned out he worked for a car insurance company and highlighted his category was driven purely by price.
When I asked him what he meant, he said:
“As long as your company name is generally known in a generally good light, you will get business”.
It took all my strength not to laugh in his face, so instead I simply replied,
“So you do believe in brand value or you wouldn’t care if the company name was generally known in a generally good light”.
You could see him look confused, so I decided to just finish the job off by saying …
“And if you believe everything is a commodity, why are you wearing an expensive watch when a Timex does the same job?”
He smiled a ‘fuck you’ smile at me, said goodbye then left.
It was a good evening.