When I work with companies to create marketing campaigns or develop promotions for their products or services, the tendency is to consider ideas that tap into customers' desire "to save money."
I don't buy it. A focus on discounting and the cost of an item is just something your customers know to use as an excuse for why they didn't choose to buy a product or service.
The truth is, if the product or service you offer is something they really want or solves one of their problems, they will figure out a way to buy it. And charging a premium may very well be the best way to go.
Consider three companies --and no, I'm not talking about Apple--that have done a great job of creating loyal customers by creating models for those who are willing to pay a little more for outstanding service or exclusive products.
Trunk Club sends a "trunk" of premium label clothes selected by a stylist to their members, usually on a monthly basis. While they emphasize that there is no membership fee to join, with an average around $150, the price of their items is not for the faint of heart.
And still, I wait with anticipation every time I get notified that I will be receiving my next trunk. Their products are always of high quality, unique and a tailor-made fit. My stylist, Mary, includes a handwritten note about what she has selected and how to put the outfits together.
Combine this service with the convenience of not having to go to the store and the lack of a discount doesn't enter the decision equation. The bonus is if I don't like items in a given trunk I can always send it back without a charge.
Why does it work? Extreme personalization and quality.
FoodFan Select is a new startup that charges its members $8.99/month for members-only savings of 15 to 30 percent off the full bill at the best restaurants in your city, anytime you go. There are no blackout days or times, and no reservations required. They are only in NYC right now, but already have more than 70 restaurants on board and almost all of them are rated 20 or above on Zagat and 3.5+ stars on Yelp.
How is this different from a daily deal site? Instead of relying on losing money to attract customers who are only interested in deep discounts, FoodFan Select is prequalifying by charging their customers a monthly fee. This incentivizes the members to frequent the restaurants participating.
Discount sites create transactional customers who are just looking for a "deal", which is why so few of them ever return. According to FoodFan Select's founder, Carlo Cisco, "restaurants are already seeing return business and check sizes for FoodFan Select members are typically 20 to 30 percent higher than the average tab at the restaurant."
Why does it work? A focus on charging for exclusivity and access.
I'm certainly not the first to laud Uber. But as a consumer and marketing expert, it is by far my favorite new app. I travel often and I hate dealing with taxis and car services. Uber has taken the pain out of the biggest problems I run into with that experience--smelly cabs, inconsistent policies about payment methods like credit cards, and arguments over whether or not the tip was included in the fare.
Uber solves all of these common problems and even more: You know the name and get a picture of the driver picking you up and how far away they are from your current location. How useful that would have been the day I was stuck for two hours in the warehouse district in Manhattan waiting for my car that was "five minutes away?"
Uber doesn't rely on providing a discount or deal to get you to use their service and the design of the app makes it easy, almost tempting, to upgrade from the regular taxicab experience to a black car service.
Why does it work? Focus on the overall customer experience and solving an everyday problem.
Before automatically deciding you need to give your customers a "deal", instead look for ways to add value and solve their fundamental problems. It's in that approach you can actually charge more and avoid the discount trap.