November/December 2016
You Have the Power! By Stan Pohmer

On a recent Friday evening, I was meandering through a regional shopping mall and passed an Apple store. As you know, Apple recently introduced its new iPhone 7 series of smartphones, and off-duty police officers hired by Apple were controlling the crowd of customers lined up in a maze of stanchions and ropes outside the store — a scene that has become quite common for the retailer.

Once there was room inside for another customer, they were allowed to enter the inner sanctum of the store itself to have the privilege of being one of the first of their friends to plop down anywhere from $649 (iPhone 7) to $749 (iPhone 7 Plus).

And if you want to listen to the music on your phone, you’ll need to purchase wireless AirPods for an additional $159, since Apple removed the 3.5-millimeter analog jack and the ability to use wired ear buds with these new phones.

And unlike past introductions where they maintained the “old” (hey, the iPhone 6 was just introduced in September 2014) series as the opening price point when they introduced the new series, Apple just had the audacity to discontinue the iPhone 6 series as they rolled out the new iPhone 7 series.

They are literally forcing you to buy their new, higher priced iteration if you want to play in the Apple phone world.

A Cult Following

All of this Apple stuff got me thinking about why and how they have created this cult-like following of customers, most of whom are not technophiles who are driven purely by new technologies by what’s under the hood.

Most of Apple’s customers can’t tell a gig from a RAM, and care even less!

It all goes back to the late 1990s when Steve Jobs turned what was then a technology-driven company into something that Silicon Valley hadn’t seen before. Jobs said, “You’ve got to start with the customer experience and work backwards to the technology.”

Jobs challenged his organization to anticipate what would make their customers’ lives easier, more productive and satisfying, and then find or develop the technology platforms to make these happen.

With the introduction of the iPod, the iPhone, the iPad, Apple TV and the Apple Watch, these were all positioned as fashion objects, pieces of jewelry, a multimedia entertainment product, a status symbol, a genie in a bottle, all of which oozed the cool factor and, yes, even sexiness!

And everything associated with the brand … the physical stores with the Genius Bars and free classes to show you how to use the products and technologies, the website, their advertising and even their packaging, all support the brand image.

Apple clearly understands who their customers are, what their needs, wants and desires are (sometimes even before their customers do!), and almost never deviates from their positioning strategy.

Apple controls their customers’ expectations and manages the entire process from start to finish to ensure these expectations are met.

Meet the customers’ expectations, keep them happy, continue to consistently feed them new ways to make life easier and more productive and you have a formula for creating almost blind loyalty.

Technology notwithstanding, Apple does a premier job of being the gatekeeper of the customer experience and post-purchase fulfillment and satisfaction. Using this as a jumping off point, let’s consider how our industry matches up to Apple’s successes.

Good, Better, Best

Most locally owned garden centers (LOGCs) employ a good/better/best step up assortments, especially in non-live goods categories.

This traditional, tried and true assortment- building model usually equates fewer features/ lower quality to a low retail price point, and a more highly featured, superior performance to a more expensive price.

In some cases the higher-priced, “best” item is the national brand and the opening price point is either a no name brand or, I’m sorry to say, the private label or house brand with the LOGC’s name on the label because the retailer wants to equate their brand with a value price.

But is that the message you really want to communicate to your customer — that a product with your name on it is of lower quality than the better and best choices available to them in your assortment?

Remember, in many cases, customers will equate lower price with lower quality.

Here’s another example, grass seed. In many LOGCs I see three good/better/best price points of, let’s say, full sun grass seed on the shelves, with ascending price points.

Now there may be a superior mix in the higher priced boxes or bags, but unless you make the gross (and probably erroneous) assumption that your grass seed customer can interpret the label germination and mix information on the tag, your customer will probably reach one of the following conclusions:

• There’s no difference in the quality between the three price points, or
• The lower price bag or box, often with your name or house brand logo on it, is of inferior quality to the higher prices offerings.

I don’t know too many customers who intentionally go out to buy grass seed so they can have an inferior looking and performing lawn. So are we doing them any favors by even offering a low quality/low price option?

Will they be satisfied with the results after they sow it and get marginal results? And if they aren’t pleased with the results, who do they blame?

In all likelihood, they won’t blame themselves (“but I followed all of the directions they
gave me!”). Probably they’ll blame you as the retailer who sold them the product that didn’t perform to their expectations (there’s that nasty “expectation” word again).

Where House Brands Fall

By carrying multiple/too many choices, are we doing the customer any favors? Are we overwhelming and confusing them by giving them too many options?

University professor and author Barry Schwartz wrote a very compelling book and gave a TED presentation on “The Paradox of Choice” where he concludes that, by providing too many options, this paralyzes a customer from making any choice and he/she walks away without making any decision at all.

Remember that your store is a destination and your customer made a considered decision to go to you with the express purpose of buying something that will solve a problem or fill a specific need that he/she has.

If they can’t make a decision due to confusion and they walk away empty-handed, they are frustrated not with themselves, but with you as their perceived gatekeeper.

Last, let’s talk about “positioning” of your house, private label or company-branded products.

In the “olden” days, your controlled brand products were usually positioned as the lower priced alternatives to the national brands. But the consumer makes the psychological link of low price equals low quality equals low brand image (and if your name is on it, the logical leap of thought is that your image is low end).

But in the last few years, there’s been a major shift that positions the controlled brands at the top end of both the quality and retail price point spectrum, even above that of the national brands.

Major retailers such as Safeway and Target, as well as smaller specialty retailers are all positioning their owned brands at the top end in an effort to reinforce their higher quality brand image.

Now, if you want your brand associated with price value, then by all means, position your owned brands at the lower end of your assortment offerings. But if you want your brand image to be of high quality, then you should consider positioning your owned brands at the top end, even above the national brands.

Like Apple, your products, services, experiences and expectations all together communicate your brand image.

How you use it and how you manage it greatly contributes to how your customer perceives you in the marketplace.

Your brand position is not dictated by someone else; YOU have the power! …

Stan Pohmer

Stan Pohmer is president of Pohmer Consulting Group in Minnetonka, Minn. He can be reached at [email protected] or 612.605.8799.


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