How to drive value through peripheral experiences
Opinion
Actively adding value to one’s brand helps to unlock available spending power during a cost-of-living crisis.
Traditionally, people have placed value on a brand or product guided by the core levers of the value equation (perceived value = experience + quality/price). However, in a market where people face up to a 24% increase year-on-year for a pint of milk, the perception of value, driven through the experience and quality levers, becomes more integral to a brand.
It’s essential to understand the context — and impact — of the current cost-of-living crisis in relation to previous recessions.
This crisis is affecting everyone differently. For example, recent Wavemaker research found that people still want everyday treats, which are non-negotiable. Many consumers are still willing to pay for the items they want. Therefore, the ultimate determining factor for customer decisions is not price.
However, this is not to neglect the ‘pinched penny’. Brands that consider price alone will ultimately face a race to the bottom in which the lowest price wins.
The strongest businesses understand the importance of ‘going the extra mile’ in altering consumer perceptions of value and how by actively adding value to their brands they will unlock available spending power.
The value of peripheral experiences to create an ‘ecosystem brand’
Peripheral experiences — or the electron structures to the proton and neutron of central product communications, which the brand offers through services, loyalty schemes and marketing of the product itself — need to come to the forefront of communications. They drive the consumer perception of value, expertise and support as well as the feeling they are getting more bang for their buck.
Those who dominate the list of most valuable brands — Apple, Amazon and Google — have pioneered the term “ecosystem brand”, connecting with customers in a number of interconnected areas through quality experiences.
They have their central proton and neutron structures, but the electrons — Amazon Prime, Audible, Google Wallet, and Apple Music — are pivotal to driving the perception of value.
Brands such as LEGO and Nike (who aren’t quite the unicorns of this world) have mastered making the peripheral experiences in their ecosystem, ‘The Thing’ itself.
For example, Nike’s Run Club app, and LEGO’s “ultimate experience centre”, LEGO House in Billund. These open-door, sub-branded experiences have been elevated to that of pure product communications.
Peripheral experience can be a service
Creating long-term value and demonstrating that value through relationships with customers is key.
Consider Aptamil or Cow and Gate‘s “Careline” service, where customers can access 24/7 friendly advice, support and reassurance through multiple channels.
While customers aren’t required to purchase a product to access the team of pregnancy and baby care experts (in other words, there is no direct revenue stream), it’s natural, especially for consumers aware of this before purchasing, that this added value will boost positive reception and/or mitigate any cost premium when they’re considering the many brands available.
Especially in a market where legislation makes differentiation more difficult than most, this peripheral service can become a powerful ‘distinction driver’.
Peripheral experience can be marketing communication itself
This is driven and enabled by technology. Take Colgate’s brilliant ‘Two Minute Tales’, which encourages children to “love brushing”. And, of course, ‘Pirate Captain Black Fang’ (pictured, main) and ‘Sparkle the Tooth Fairy’ tales are crafted to ensure the optimal two-minute teeth cleaning time.
Especially as a stressed parent, you can imagine how loyalty for price can weaken in comparison to creating a long-lasting bond with a consumer by making bedtime a little less stressful. A peripheral experience offers consumers a little more.
Peripheral experience can be expertise
A great example of a brand that uses expertise as a peripheral experience is IKEA.
In its annual Life at Home Report, thousands of people are asked to share their thoughts and feelings about where they live. As the brand states, it’s their “fascination with life at home [that] makes us IKEA”.
By learning what makes life at home better and how people can thrive there, IKEA establishes itself as an expert in the category and, therefore, worth paying (perhaps, more) for.
The report also contributes to the overall experience. The responses inform how it creates its well-known ‘spaces,’ what products it pushes, and how it make homes reflect us.
As a brand, IKEA knows we’re more likely to feel good about our home when it reflects our personality. Therefore, the Life at Home report is a natural extension of its brand ethos and part of its central product communication strategy.
As a result of their seamless integration into consumers’ lives, these peripheral experiences are powerful brand-building opportunities. They’re authentic because they deliver real value to the customer rather than simply appealing to their bank account.
In addition, the idea is that the tactics employed to promote one service will indirectly benefit all of them. Colgate’s ‘Two Minute Tales’, for example, drives attention to the benefits and quality of their electric toothbrushes.
The most important thing to remember is that this isn’t just about what brands offer. Creating peripheral experiences is about placing customer-centricity and innovation as the key factors that surround the brand’s core offering.
It is the mission of the business to deliver products, services, and experiences that the brand represents in order to create meaning. Ultimately, this will cultivate consumer loyalty and, perhaps more importantly, brand recognition and growth. An absolute necessity in a cost-of-living crisis and beyond.
Emily Fairhead-Keen is a senior strategy partner at Wavemaker.