In the Long Run

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Pay less up front, pay more later. Pay more up front, pay less later.

In most cases, provided you’ve done your research, paying more upfront usually means paying little to nothing down the road. The inverse is obvious.

That’s a universal principle hard to swallow for the penny-pinchers who recoil at the mere scent of a high price. But it’s something to remember when making your next purchase.

Foundation of a Feeling

As the differences get smaller, the purely functional reasons for premium goods fade away, and instead they are purchased for the reason we’ve always purchased luxury goods: because of how they make us feel, not because of what they actually do. The fur coat is not warmer than the down jacket, it’s merely harder to acquire.

That’s a snippet from a recent post by Seth Godin.

There’s a lot of truth to this. And it’s for this reason—people purchasing based on feelings rather than for function alone—that brand identity and marketing are such important factors in business. How a brand resonates with its would-be customers is just as important as the goods and services it offers.

Recollecting my two most recent posts about SAAB automobiles, I stated that despite its failures, I still have a great appreciation for SAAB cars. That’s because to me SAAB successfully created a positive impression. In its early years, SAAB also maintained an air of intrigue; a feeling of, “Yeah, other car manufacturers do it this way; we’re going to do it differently.” A lot of head-scratching mechanics can attest to that. Better or not, it was different; and that brings a lot of appeal.

Feelings have to have a foundation. Some foundations are built on how things look; some on how things work; some on how you’re able to live now that you have the item—or a combination of all of these things. People have different criteria that they use to sift through what they buy and don’t buy. You can accomplish about the same with a Windows OS as you can with an Apple OS. You just go about it in a different way. But the difference in experience creates a feeling that customers swear by.

Like Seth said; sure the down parka and the fur coat both keep the wearer warm just the same. But the fur coat offers a solution that the down parka can’t: the richer image associated with scarcity. To some this is unimportant; but to the one wearing the fur coat, it solved a particular problem.

So ultimately it’s the perceived worth of a thing—what it offers in addition to itself—that forms that feeling, bolsters it and drives purchasing decisions. That’s why brands aren’t just selling a product. As Seth accurately states, it’s not just what the thing does. Coffee to some is just burnt water with an energy boost. But take that black liquid and put it in a white mug on a table surrounded by friends and family with a crackling fire in the background—now you’ve got a feeling that connects people to the coffee more than the coffee could ever draw buyers to itself. While a company sells a product or a service, a brand is in the business of selling a feeling, an experience and a lifestyle.