Why Some Brands Can Charge 10x More transcript

This is a bottle of hand soap from Dove. It costs about £3. This is a bottle of hand soap from Aesop and it costs £35. Both of them clean your hands, so why are people paying nearly 10 times as much for the same product? And the thing is you can do this with basically anything. Supplement brands, jewelry, clothes, skin care. You can have two products from a functionality point are basically the same, but one brand somehow gets away with charging three, four, five, 10 times as much as the other one.

There's one thing that separates each of those brands and it actually happens long before the customer ever reaches the checkout. It's how they have positioned themselves through long-term marketing. So, I want to show you exactly how brands can build that perception and how some of the biggest DTC brands are doing it right now with their ads. Let's go back to the hand soap example, shall we? It's probably the cleanest example, pardon the pun.

If you remove everything from the bottles, the logo, the ingredients and you put them both in plain standard [music] soap bottles and then you ask someone to wash their hands with them. There is a limit of how much someone will pay for one of those soaps. Maybe one smells nicer or one leaves your hands feeling a little more moisturized. There can absolutely be a difference in formulation, in smell, in quality, but it's when you put them back in their original packaging when things really change because Aesop doesn't show up in people's brains as soap.

You've seen them in stores, you've seen them in nice hotels, you've seen them in fancy restaurants. In fact, you've even seen them in your rich friends' houses. The brand has become part of a visual language that you associate straight away with nice, rich things. You see the soap in someone's house and you go, "Oh, well, they're doing well." And the thing is brands spend an enormous amount of time and a ludicrous amount of money to get to that place.

We like to imagine that we're sitting there and we're reading the ingredients of every product that we buy and we're comparing them, but realistically purchases don't happen like that. You see something, you already have an idea in your brain of that. You look at the price, you look who uses it, you look at the sites, you get delivered the ads, your brain builds a perception of that brand. And then you decide whether that perception is worth paying for.

I've worked with so many brands in such similar spaces. One succeeds and the other one doesn't. And it's usually because the perception of that brand is completely different. People see a lifestyle with one brand and they see an essential with the other. Even if they have the same ads, the same landing pages, it's just [music] kind of ingrained in people. And the price itself is actually part of that perception. This is something that I see brands get wrong all the time.

They make a really good product in a very competitive space and they go, "Okay, the easiest thing to do here, let's make ours as cheap as possible and everyone will buy ours." Which, don't get me wrong, it can work if you look at supermarkets and their value-based products, but it can also undermine how people think about your product. If you put two bottles of wine in front of one of your friends, one of them cost £8, the other one cost £80 and ask them which one they think is better, they're going to say the £80.

Even though they're made the same, they taste the same, because of that price, your perception is changed. Especially if you're not a wine expert, because you don't have the expertise to break that down. So, the price is realistically the only thing you have to go by. A premium brand reinforces the expectation surrounding that number. The product photography, the packaging, the website, where the product appears, who wears the product, who uses the product.

The ad you clicked on before you reach their landing page. And that's the important bit for D2C brands, because the product positioning happens well before the user ever even reaches your website. It all starts with the creative, your storefront if you're a D2C brand. If I show you an iPhone UGC of someone in their kitchen talking about how great the supplement is and how it's currently 20% off. And then right after I show you a different supplement with all the same things in it but being shown by an athlete, an expert who is explaining why this product costs what it does.

It's the same category, but suddenly we've put a completely different frame around the product. And this is probably the easiest example of how brands can borrow status. Take a chocolate bar, right? A chocolate bar is a chocolate bar. Put it in the hands of Mr. Beast and suddenly your perception of that chocolate bar completely changes. The brands inherit the status from the person they're showing. Luxury brands have done this forever.

Think about Gucci and all the models and famous people that wear their products. Fashion brands will put certain actors in their clothes, certain musicians that reflect who they are or who they want to be. And obviously we're not all sat there thinking, "Oh, if I wear this, I will become that person." That's ridiculous, but over time that compounds. It builds subliminally in our brain to associate X with Y. It tells you who the product is for.

It tells you what kind of a person uses it. owning becomes a signal to other people. The luxury handbag market is a perfect example of this. The same for Rolex watches. We all have this perception in our brain that this product is normally always bought by this type of person. Because people buying a Rolex over a Casio aren't bothered about how well the watch tells time. They're bothered about the status that it has when they're wearing it on their wrist.

But the same psychology principles work further down the price ladder as well. You see it with Gymshark. You see it with certain supplements. And consistently in the jewelry market. You can build a very large D2C brand just by getting that association right. Momentous is a prime example of this in the D2C world. Creatine for example, Momentous don't have exclusivity to creatine. There's so many companies, arguably too many, selling creatine.

Myprotein currently has a creatine product on sale for far cheaper than Momentous. So Momentous needs to give people a reason to pay a premium. And so you look at the environment that they've built around the brand. Their website talks about professional athletes and sports teams using their product. They work with recognized experts in the health and wellness space to back up their claims. It literally says on their website that all 32 NFL teams trust this company.

They've also previously partnered with Andrew Huberman, again a massive player in the space. So imagine if you are their target customer, you train every day of the week. You listen to performance podcasts when you run. You care about recovery. You follow all the professional teams and the researchers. You are incredibly deep in this space. Now you see Momentous continuously spoken about by those people in those spaces.

So by the time that you reach their product page, you're no longer just comparing a white powder, and by that I mean creatine. You're comparing Momentous to what the cheaper product represents. The association is already done. You already have that in your head. You are buying a brand. You know that, but you're fine with it. And this is where ad creative becomes incredibly important, because you can have those partnerships sitting on your website and hardly anyone will ever see them.

Or you can put them into the creative and start to build authority and brand perception from the second they're scrolling through their socials. You put the authority people in the ads talking about the product so that we recognize them. I think if we actually have a look at their ad account, you'll see how you can't just copy any ad account, okay? So their top performing ad right now is this one. >> [music] >> It's very mid.

It's a studio ad, and I know from making a lot of ads like this, they do not perform this well on every account. And the reason that this performs so well is because all they need to do is show the brand and show the product. People match that with the brand perception that they have, and they purchase. And so a guy in his basement which wants to make a creatine brand sees this and goes that's their best top performing ad.

I'm going to copy that and then wonders why they don't have the same results. This is why. And then look, their fourth top performing ad is one with an expert. Dr. Stacy Sims recommends this product and it's her for 30 seconds talking about the product and why it's so great. You see, we're taking those experts, those authority figures that people recognize and we're putting them into the ads that are being served to potential customers.

Because every single ad that a potential customer sees is reinforcing that brand positioning. Jewelry is another amazing example of this by the way, because the difference in manufacturing to perceived value can vary dramatically. Crafted, it's a brand that I've looked at quite a bit. And a big part around why this brand has done so well is because they get the products in the hands of the right people. If you've got recognized athletes, influencers, creators with huge audiences wearing your jewelry, the advert is no longer just saying, "Here's a cool gold chain." Instead, you're showing who that gold chain belongs to, who you should associate it with.

And that gives the product meaning beyond just what it's made out of. And people, trust me, they will pay for that. All you need to do is take a scroll through their Instagram and you can quickly see that they are associating their brand with people that that category recognize. A good example, Zayn, right? From One Direction fame. There he is, look, Zayn spotted in Gemstones. But then all you need to do is scroll through their Instagram and you can see they are building this vibe around the brand so that you can identify it, whether it's who you are or who you want to be.

This is the reason why brands obsess about who they want to partner with or who they want to send the product to. Because yes, you're getting access to a brand's audience, but you're also pairing your product with that customer base, with that audience base. If I'm selling running shoes, I want to go to the top running athletes. If I'm selling skin care, I want to go to dermatologists. I want to go to skin care experts.

If I'm selling makeup, I want to go to the people making makeup tutorials that people respect and follow. There's also another layer of this that a lot of people feel a bit uncomfortable about admitting. And that is that the products that we buy send signals about who we are. They say things about us. Sometimes for other people to see that, but sometimes just for us. Don't get me wrong. I am a absolute sucker for this.

The second that I could afford to buy nice branded clothes, I went to those brands that I see the people I respect wearing and I go and buy them. My wardrobe is full of Carhartt clothes because I love what the brand represents. The people that wear them, I respect them. And so I'm just going to keep on buying them. Another great example of this is Tesla. Kill me, but I have a Tesla. Part of the reason I have that is not because it's the best electric car on the market, but because I like Tesla.

I like what they're doing in the space. I think they're a cool brand. And so, yeah, I have brand bias. And this has become even more of a thing now because people are exposed to brands way more than they used to be. No longer do you have to walk down a London High Street to be exposed to the top brands. All you need to do is scroll through your Instagram feed because TikTok is now teaching you about fragrances and suggesting the top ways to smell.

YouTube is teaching them how to buy expensive watches. Someone gets into running, 3 weeks later they are bombarded by adverts for every single running shoe company. And as people become more educated about a certain category, they start to, like we said, listen to podcasts, associate themselves with certain people who then associate themselves with certain brands and products. Coffee is such a great example. Most people start drinking instant coffee and they're like, yeah, that's fine, that's all right.

Then they learn about coffee beans, then they learn about grinding your own coffee beans, then they buy an espresso machine, and then suddenly they are explaining at a dinner party why this bean tastes better than that one, and why someone needs to spend 20,000 pounds on a new espresso machine. The deeper someone gets into a category, the more the basic option becomes less appealing, less satisfying. They want the version of the item that's made for the people that know as much as they do.

And that gives the premium brands an opportunity because suddenly they can sell to a type of person that's willing to pay more just to look or feel a certain way. Guys, before we go any further, I want to give a big thank you to Omnisend for sponsoring this portion of the video. All the e-com brands that I see scaling with serious numbers have one thing in common and that is they have a ton of automations running behind the scenes.

This isn't optional anymore. Most brands have automations running. Sure, however, usually the segmentation is pretty weak and there's no real automation behind it. And what's even worse is most e-commerce brands don't even realize that they're losing 30 to 50% of the revenue that they could be making with email and SMS. And that is where Omnisend comes in. It fills that gap. They offer drag-and-drop emails. They've got pre-built automations and most importantly proper revenue tracking.

You can send a welcome flow abandoned cart email and even birthday campaigns in minutes. And most importantly, they have SMS built right in. No extra tools, no weird integrations, it's just it's just all there. And what's really cool is it's worldwide and it works alongside your emails just like SMS should do. I've paired with Omnisend to give you 30% off your first three months. All you need to do is use the code FRASER30 at checkout or use the link below.

Go check them out and see what real clean email and SMS can do for your business. Now, back to the video. There is an important distinction to make here because I'm not saying that every premium product is identical to its cheaper counterpart. Sometimes the expensive one is genuinely better and there is a reason why it's expensive. The materials can be better, the ingredients, the quality can be 10 times better than the cheaper one or the customer service, whatever it is that justifies that price.

If we go back to Momentous and creatine, they pride themselves on third-party testing, which costs more money, which means that they have to charge more for the product. Aesop has developed a special formula, which again justifies the price. So, you're not always literally buying an identical thing. The big part here for marketers is that better quality doesn't always communicate itself. The customer has to perceive it that way.

Just because you spent 2 years perfecting the perfect product, you spent thousands on manufacturing to ensure it came out in mass production just the way you wanted it to, because the customer sees a 3-second ad. That's the starting point for them. They're not seeing all the other stuff that came before. So, the premium brand position requires the marketing to make those difference easy to understand. If you have a superior ingredients to the cheaper version, then show me.

If an elite athlete uses it because it has superior ingredients, show me. If the manufacturing process is so different to your competitors, then show me. A great example of this is The Black Stuff, a soap brand that we work with. They pride themselves on the fact that these are handmade soaps, made by a small team in a factory in Dublin. And so, when we make their ads, we show that consistently, because that is what separates them from their nearest competitor, which we know is mass-produced.

And that explains why The Black Stuff is a little more expensive than your average soap that you find in the supermarket, because of that manufacturing process, because of the higher quality materials. And we make sure that we relay that in pretty much every single ad that we make. But then, you have scarcity. Luxury brands are the most aggressive example of this. Rolex is very famous for having products that you can't walk into a shop and simply buy.

There's certain handbags that have a waiting list on, because the moment that things are difficult to get, people behave differently around them. They want them more. You see like a lighter version of this on D2C. Limited color runs, for example. Special edition collaborations. Certain drops or early access. Or even a product selling out early creates demand for the next time it comes around. But this only works when the product is something people want.

You can't pair scarcity with a product that people don't want because no one cares. The brand needs to create that desire for it to work. Scarcity just adds layers of pressure on it so that they make the decision there and then. You see that something is a limited edition, you're more likely to buy it there and then because you're not sure if you come back in a week whether it's even going to be there. Brands can also change the way that you perceive the price by controlling what you're comparing it against.

This is called price anchoring. Say a company has three products. One's £50, one's £100, one is £300. Suddenly, that £100 one looks pretty tempting. But take away that £300 one and suddenly your opinion changes. This happens everywhere. Software is a prime example of this. Cars, restaurants, fashion, everyone does this. You can have a range of products, but the chances are there's a certain product that is always the one that sells out because the other ones are just there to make that one look good.

A £4,000 jacket can make the £200 jacket suddenly seem pretty reasonable. A very high expensive flagship product can suddenly push the entire brand upwards. Once again, your buying decision is based around the context that the brand's giving you. And for the brands that are watching this, here's the part that you probably care about the most. Your brand positioning isn't a paragraph that someone in your brand department put inside a strategy deck.

It's what the customer repeatedly sees. For a D2C brand that has a huge spend on meta, that is where a lot of your perception is going to be made. It's going to be created in the ads. Let's say that you want to sell a supplement for twice the price of the obvious alternative. Your creative needs to carry that premium look. That doesn't mean that everything needs to be cinematic and you spend millions on high production ads.

Because I've talked about it on this channel, we make high production ads. They don't always work for everyone. The message has to explain why somebody would care. Maybe the strongest creative is an expert chatting in their kitchen on their iPhone. Maybe they're demonstrating why the cheaper alternative can't do the same thing as yours can. That's why I spend so much time talking about the angles and why the format matters, because those first few seconds really matter.

Because underneath all of this stuff, you're trying to find the reason that someone is going to choose your product. And unfortunately, it's not something that happens overnight. The brands that people are choosing to spend more on have been stacking this stuff for years. Every influencer, every customer review, the packaging, the website, everything, the way the founder talks, it all adds up. Eventually, all those little interactions that customers have with your brand build into a perception that helps them buy the product.

The $35 soap makes sense because of the world that Aesop has built around a $35 soap. The marketing changes what the product means to someone. It goes from just being a piece of jewelry to suddenly being something that makes them seem more wealthy than they actually are. Once that changes, suddenly the amount people are willing to pay for it also changes. So, if you're a D2C brand watching this, you should ask yourself a pretty basic question.

After a customer has seen 10 five of my ads, what do they think about my brand? Do they understand why it costs what it costs? Do they know who it's for? Or are you giving them a good enough reason to purchase yours over the cheaper alternative? Because everyone can slap a 20% off discount code on, but that doesn't automatically mean that people are going to buy your product over that one. Whereas if you build creative around the strongest reasons to why you exist, suddenly you start to position yourself.

And that is why creative goes much deeper than just changing your hook and testing some different messaging. Because you're deciding what ideas repeatedly associate themselves with your product. That's the bit that compounds. It's not something that is built overnight. If I was doing this for a premium brand, the first place I'd look is the competitors, the people that you want to be. Look at what the customers are saying in the reviews.

Why are people choosing this brand over this one? And then replicate it in your own ads. Are the reason why people are choosing the more expensive because of the ingredients? Or is it because they saw X person wearing it? Just replicate it and do better. And if you happen to be running a DTC brand and you're spending over 70,000 on paid media and you want to position yourself correctly with your ad creative, then scan the QR code on the screen because I love to work with you to take care of all your ads.

We work with established brands to help take you through that entire ad creative process from strategy through to pre-production to you finally launching those ads and testing them. And if you're earlier on in your journey, don't worry cuz I've got something for you as well. It's called the ad creative course. You can check out a link down below. It's perfect for those who are just starting out and want to start building some converting ad creative.

All the links that you need are down below. I appreciate you sticking around for this one. Make sure you hit subscribe if you like videos like this and leave a comment as well. And I'll see you in the next one. Bye-bye.