Back in my advertising days, there were certain clients that were considered prize accounts. Every agency wanted their business. Agencies would do whatever they needed to win them. That usually meant cutting commissions, reducing fees and throwing in freebies.
One of the biggest accounts for the agency in which I was a director in the 90s was a marquee global brand held by our partner offices around the world. The problem was that under the terms agreed by our head office, we made no money from that client’s business. We held it for the prestige. Nothing more.
Ninety percent of businesses don’t set their own prices. They are set by their competitors. If one competitor drops the price, other competitors are obliged to drop the price. These businesses operate in a buyer’s market.
So, what about the other ten percent of businesses? Why aren’t they subject to the same price sensitivity? Because their products have a prestige and cache that the others don’t. Because their reputation puts them in another league.
Their products are prize possessions. There’s pride of ownership.
They are prized business partners. Their advice is respected, even treasured.
They are prized employers. Everyone wants to work for them. They turn job applicants down by the thousand.
They don’t discount their products (think Apple, Miele or any prestige car brand). These businesses operate in a seller’s market.
Why? They have a prize mentality.
They ensure that their technology is cutting edge, their design likewise.
They leverage their founders’ or their CEOs’ star status. Their leaders are worshipped by staff and customers alike.
There’s often a waiting list for their products or services.
Their brand is easily recognised and evokes positive emotions. They are authentic and consistent.
They don’t chase customers. Customers chase them.
Customers don’t simply buy their product. Their customers become disciples.
They give their customers places to worship – concept stores that look like temples.
Customers buy into their ethics and their philanthropy.
They associate their products with icons – the best and most admired entertainers, athletes and influencers.
They have personality. If humans, they’d be people we’d want to be around.
These are the reason that they command premium prices.
These are the reasons they operate in a seller’s market.
These are the reasons they are the prize.
Photo by Fauzan Saari via Unsplash