Holiday Season Price-Cutting and Hard Sell Can Damage a Brand

The more you sell at Christmas, the more crucial it is to have a plan in place to recover losses early next year

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It's a shooting war as of next week. Black Friday is the selling season kickoff. It's sell or die by Dec. 25 if you're a retailer, and time to help them cheat death if you're a brand.

The toughest part is that you're likely going to see your brand lose value over the next month or so, perhaps more so the more successful you are at selling.

Consider that your actual cost of holiday sales consists of two expense lines: First, the tangible costs of promotional pricing, outbound marketing, extra staffing, etc. and, second, the intangible costs incurred by your brand from all of those tangible efforts, including the negative experience that many consumers associate with holiday shopping.

My guess is that such a calculation will lead you to work on rebuilding your brand come January so that you can recoup some of those expenses. You may want to start planning now to make up lost ground in 2012. Here's my logic:

The year up to now was glorified lead gen. You've spent a lot of time and money establishing and communicating the attributes that distinguish your brand. The argument has always been that establishing share of mind, associated benefit and emotional qualities (including likability) with consumers pays off in the long term. Well, that time has come, as it does every year.

So now isn't the time for simply engaging or entertaining consumers. Since you can't wait any longer for the consumer relationships you have established to pay off, you have to change the substance of your message to a harder sell during the holiday season. Your virtual relationships need to be converted into real purchases. In effect, you have to reset to zero all the metrics you use to measure brand value.

Promotional pricing slashes perceptions of brand values. This is a tough one to wrap your head around, but consider that you've priced your branded product at X all year long, but now it's available for X minus Y. You can see this as offering a consumer benefit -- they're getting more for their money -- but consumers can easily come to perceive it as the "correct" price for what they're getting. This becomes an issue for 2012.

You can't control selling as you can branding. Generating sales is different from promoting brand values, and it's dependent on place, time, crowds, weather and a host of other variables. If past selling seasons are any indication, these conditions aren't going to be overly supportive of all the good things you want consumers to associate with your stuff. Another problem moving into next year.

You end up spending a portion of brand value, and the goodwill of your customers, when you hit them over the head to make holiday sales targets. It's unavoidable; but the net effect is that the experience can leave your brand depleted, if not changed outright.

Do you have a brand recovery plan in place? You might need to repair:

Processes. The mad dash to make sales probably revealed a lot of shortcomings or disconnects in your branding (you likely saw what attributes best translated into motivating factors, and which ones were pleasant enough for consumers but otherwise forgettable when push came to shove). You can fix them, or at least strengthen and improve your planning process so you don't come up with useless attributes in 2012.

Pricing. It's hard to recover from sale pricing, and your January could well be full of it. Analyzing your price/value ratio is something you should do on top of your processes analysis. You can't go back to charging what you used to charge for the benefits you used to promote ; you've announced to the market that the equation wasn't wholly valid. Maybe this is a good chance to re-imagine and invent a new value prop for your brand.

People. Whether good or bad, the experiences your customers had with your products or services during the holiday selling season will be different than they are during all other times of the year. You need to reconcile the two and create ways to add value to those customers whose experiences were less than stellar (or that only involved price).

There's not much you can do about spending your brand value over the holidays. The challenge is to recognize it and take the appropriate measures to lessen its effect the next holiday season and restore during the next year what you spent to make this year's sales.


JONATHAN SALEM BASKINis president of Baskin Associates, Inc., a marketing decisions consultancy. You can follow him on Twitter at @jonathansalem. .
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