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Negotiating the new value exchange


Negotiating the new value exchange


Marketing budgets have contracted, while business expectations and customer expectations continue to grow. Budgets are already stretched to breaking point. Delivering value in a way that benefits both the customer and the brand demands a new way of thinking, not just a rethink of current standards.

Today, value is usually tipped in favour of the receiver. Many expect shopping to be an experience not just a transaction and data driven technology stokes this trend. When people try on Burberry garments, embedded RFID chips trigger content, which is displayed on interactive mirrors in store.

People also look to brands to help them save time and/or money on everyday purchases. They want instant gratification, more tailored products and even tailored pricing. In the United Kingdom, when a shopper spends 20 pounds or more on groceries in Sainsbury’s, the retailer’s Brand Match system automatically compares the prices of the brands in the trolley to other leading UK supermarkets. If the competitors are cheaper for the same goods, Sainsbury’s gives each customer a coupon for the exact difference right there at the checkout.

These days, as brands vie to deliver even better customer service or competitive pricing, serving up the expected is a fast road to bankruptcy. This suggests brands need to consistently over-deliver. But, businesses and marketing budgets are already stretched, how can this be viable in the long term?

Thinking of value as a negotiation paves the way for a new value exchange. Negotiation is an active exchange between both parties and the best outcome is win-win. Likewise, value should not be something given away to customers, but actively co-created, and mutually beneficial.

Value becomes something both parties participate in. For example, Kellogg’s were among the first to set up pop-up Tweet Shops inviting consumers to get samples of Special K in exchange for a Tweet. BWM’s KMart client turned the tide when they moved from ‘Everyday low prices’ to ‘We make low prices irresistible’, where the brand delivers quality at a great price, inviting consumers to be inspired and share their inspiration.

The onus is no longer just on the business to over-deliver, the onus is also on the customer to co-create and share the experience. This means brands can be more demanding of consumers.

According to Trendwatching, a new suite of ‘Demanding Brands’ demands significant contributions from users, in terms of time, effort and money. Some demand that people live healthily or behave well, for example, time-locked Tupperware brand Kitchen Safe, which keeps hands off the cookies.

Woolworths has introduced ‘mix your own’ muesli, which requires greater effort on the shopper’s part, but is a bit of fun, involves them and creates mutual value – the unpackaged muesli is priced at a premium. London’s Unpackaged grocery store requires shoppers to bring their own containers. They can buy just as much as they need, reducing packaging and waste.

These brands are not only able to charge a premium, but increasingly, they’re earning respect. This suggests the value exchange has been tipping too far in customers’ favour and even customers are acknowledging it. They don’t necessarily want producers and farmers squeezed to within an inch of their livelihoods just to slash a few more cents off the price of a T-shirt or grocery item, which is already considered a good deal. They don’t necessarily want things to be too easy because this makes them lazy and fat. They respect and, more importantly, value brands that aren’t afraid to seize the high ground.

The ‘Experience Economy’ has mainstreamed and people value life experiences as much as, and sometimes more than money or possessions. But the onus does not have to be exclusively on brands to deliver these experiences right up to breaking point for their own business or their suppliers. People want to feel good about their purchase. This means many are prepared to step up and contribute more. It may also mean that if a brand gives away too much, it will gradually lose respect. In the short term, giving away less can get Australians noticing and talking about your brand again. It’s a bold move, but by giving less you may ultimately get more.


Moensie Rossier

Moensie Rossier, planning director at BWM, is a well-travelled planning director and digital trends writer, with advertising and media experience in the UK, Belgium and Australia. She’s worked on major FMCG brands from P&G, Unilever, Colgate Palmolive, Campbell Arnott’s and Sanitarium, as well as technology, telco, tourism and government accounts.

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