Especially in today’s turbulent economic times, we’ve seen in-home premium brands shine as people substitute out-of-home indulgences for smaller everyday premium pleasures. For many consumers, premium products offer authenticity and quality.

Unfortunately, commanding a premium isn’t easy.

Although premium products assume a higher price, this element alone is not enough to become a premium brand. Consumers are savvy and will see right through higher priced goods with no compelling ‘premium reason-to-believe’.

Moreover, maintaining a premium positioning is even more difficult. As businesses with premium brands seek growth, there is the constant temptation to achieve short-term volume growth through discounting and promotions, ignoring the important ‘value vs. volume’ premium equation.

This short-term growth tactic often tarnishes the premium brand equity and can even destroy brands, as Lacoste learnt this the hard way. In the 1970s, Lacoste opted to engage in heavy discounting to ward off new competitors like Ralph Lauren. However, by doing this the brand lost its position of being the leader in ‘preppy’ fashion and its famous crocodile became an endangered species. It took a lot of resource, time and a stricter premium price strategy to get the brand on the right growth trajectory again.

Not only do premium brand managers have to contend with the volume versus pricing concept, there are also market dynamics and competitors to consider. Premium is a ‘relative’ concept – so when a new super-premium set of entrants arrive, the incumbent premium players can be relegated to almost ‘mainstream’ status.

Cementing your premium position requires premium-thinking at every touch point. Holding a longer-term brand equity view is merely one piece of the ‘premium pie’. There are a number of other brand levers and actions that are critical for brands to be able to develop and maintain that lucrative premium position in the market.

Consider these three ‘premium principles’:

Create the premium experience at every touch point

A significant reason why consumers buy premium products in the first place is the fact that it offers them a more enjoyable brand experience (whether it’s being spoilt in first class on an airplane or just enjoying that cup of great coffee). Premium brands need to consider their brand touch points as ultimate consumer moments of truth and adapt them accordingly.

Give your consumers a premium path to follow

Consumers are on a constant mission to progress in their lives, and premium brands need to acknowledge this. Just as consumers aren’t stagnant, so too should premium brands should always give their consumers (and potential consumers) somewhere to go to.

Be brave, be exclusive

It’s always tempting for marketers to grow their brands through extension – moving into new territories and products, and getting their brands in front of more people. However, for premium brands this is not always the answer. It comes back to the concept of exclusivity: too much availability dampens demand and lowers price, the antithesis of what a premium brand stands for. Therefore, it’s critical that premium brand marketers be brave on that important ‘volume vs. value’ equation – never straying from their long-term premium strategy.

Sometimes the environment in which you operate requires a short-term business response, but could potentially tarnish a premium brand over the long-term. Smart premium brands never respond to these opportunities at the expense of their core brand equity.

It takes bravery, unwavering focus, determination and smart marketing to command a price premium. Nonetheless, brands that utilise the ‘premium principles’ highlighted above over the long-term for growth can attest that premium is a powerful space in which to operate.

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