It's no surprise that most consumers want more than just cheap prices and fast service. Although these things are important, they're only a small part of the equation when it comes to successful marketing. So how do you figure out the rest of that equation? According to Nancy Koehn, associate professor at Harvard Business School and author of numerous books, including her latest, Brand New: How Entrepreneurs Earned Consumers' Trust From Wedgwood to Dell, it all comes down to "aspirational marketing." In her book, Koehn details how Estée Lauder, Michael Dell, H.J. Heinz and others took their businesses to the top using this marketing technique. Read on to see how it applies to you.
Entrepreneur.com: In your book, you talk about "aspirational marketing." Can you explain this concept?
Nancy Koehn: The basic concept of "aspirational marketing" is reaching consumers and helping them deal with, ameliorate and understand issues of social place and personal identity. For example, the wife of King George III, Queen Charlotte, endorsed one of Josiah Wedgwood's most popular lines of china. People could, by buying Wedgwood china, have a sense that they could aspire to living a lifestyle enjoying the fruits of a class ahead of them.
Entrepreneur.com: How is this approach different from the bulk of marketing strategies we've seen?
Koehn: My own sense of the vast majority of entrepreneurial marketing efforts today is that most of them have been oriented much more around functional benefits of a particular new product. So a certain Internet technology will allow consumers to communicate faster or it will be cheaper. Consumers care about a lot of things, and price and time are two of them, but they are just two of at least 10 critical preferences for consumers.[including] issues of convenience, control, community, self-identity and social standing.
Entrepreneur.com: Can you give an example illustrating this consumer behavior?
Koehn: Estée Lauder is a great example of someone who created a prestige segment. She'd been marketing cosmetics, sort of going door-to-door to beauty parlors in New York in the '30s during the Great Depression. Why would women be interested in paying a little more for a lipstick at a time when money was so tight? The answer is that women could have a sense of control over their appearance, a sense of sophistication by paying a little bit more for an Estée Lauder lipstick. So when she finally founded her cosmetics company in 1946, her value proposition to consumers wasn't lower prices for less; it was slightly higher prices for department-store-distributed cosmetics. Estée Lauder understood that value was something that was affected by a lot of things, not just price.
Entrepreneur.com: Reflecting on the mistakes and successes of the people in your book, what advice would you give entrepreneurs today?
Koehn: The story of the book isn't about six lucky, talented people. The story of the book is that there are incredibly important business lessons to learn from these successes. Lesson one: Figure out a way to communicate with your consumers to solicit feedback from them, especially early-on in the life of an entrepreneurial venture. Lesson two: Learn quickly from your mistakes, and don't be afraid to make quick adjustments. Lesson three: Figure out what you do well as an entrepreneur and what you don't do well, and then hire people to do what you can't. Lesson four: Look around you in a very creative way. The market is much broader than simply the leading company, the leading stock price or the venture capitalist's best guess about a young market. The market has all kinds of different facets to it. Walk the streets; get firsthand knowledge of your product, your organization and especially your consumer.