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You and I have already looked at two things you shouldn't do in order to use "scarcity" as a strategy. 

  • You shouldn't spread yourself thin by doing everything your customers ask of you, product/service-wise. You don't want to just be someone "convenient", you want to be chosen because your products are excellent.
  • You shouldn't let customers dictate terms of sale and delivery. By being firm, customers believe you when you say something is in limited stocks. This creates urgency.

Ok, on to the third point!

 

3. You shouldn't: Dilute your brand power.

What is brand power? It's hard for me to sum it up nicely in a sentence, so I'll try to describe it with a few sentences. Brand power is the force that makes customers:

  • travel far and wide just to come to your store (or your booth) to buy your products.
  • genuinely engage with your social media accounts because they want to. (Not to ask "ada saiz tak?")
  • feel frustrated when they couldn't place an order because you're out of stock.

I'm trying to paint a picture of a brand that's much loved and thought of. It's not exactly something people need, but something people want. In the world of marketing, "want" is exactly what you should aim for. 

Brand power makes people beg for your products, not the other way round.

Ideally, brand power is something that all brands should have sole control of. It should be wielded and monitored only by the brand.

But sometimes, it seems strategic and convenient to share the brand power with other parties:

  • Agents
  • Retailers/stockists
  • Distributors

These parties can help a brand spread to other profitable locations and handle the nitty gritty details of getting products to customers.

Theoretically, this would be awesome for the brand. You'd be able to concentrate on product development, marketing, funding, and other equally important tasks that need attention.

 

The problem with selling through other parties

So what's the problem? These are the potential issues with giving away the power to other parties:

  1. Can't control customer's experience. The sales process, delivery, packaging, etc.
  2. Can't control pricing. Depending on your agreement, the other party may be able to raise and lower prices arbitrarily according to their own agenda.
  3. Can't control marketing. Are they portraying your brand personality correctly? Or are they intent on making money that they would do anything to make the sale?

I'm not saying these problems will come up every time, but the potential is there. And the worst thing about giving away brand power to other parties?

The customers don't come to you. 

Ideally, whenever customers want your product, they should come directly to you. No middle-men involved. Direct contact with the brand is what creates brand loyalty. You want to create a big and engaged audience for future products.

But young brands often turn to other parties to make the product more accessible to customers. They try to make the product more available. More available = more sales. Right?

It can be flattering to have a major retailer invite you to sell your products on their platform. But is it the best path for your brand's future?

Yes. But when you sell your products through other people, the brand power will be diluted. You can't make people travel all the way from Penang if they can get your product in their neighbourhood. It's hardly scarce.

 

How can you make sure that you use the scarcity strategy correctly?

The solution is investing the time and money in developing your own platform.

  • You can invest in an intuitive, easy-to-manage e-commerce site.
  • You can develop your own delivery system.
  • You can hire people to handle customer service.
  • You can hire people with qualifications to handle marketing, sales or other areas you want to delegate.

And the list goes on. These improvements concentrate on your brand strong and established, instead of focusing on expansion too early.

It actually isn't wrong to engage agents, retailers and distributors. They are key players in any expansion strategy. But don't be too hasty and flood the market with your product. 

Concentrate more on your platform. The fire will catch slower, but burn longer.

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