The Fever-Tree Effect

Brands were originally created to provide customers with a reassurance of their provenance and quality. As the number of brands grew and brand management became more sophisticated, so the search for differentiation became a key objective.

However, in the last twenty years there has been an inexorable trend towards commoditization, with consumers exerting downward pressure on price and many companies exacerbating the situation by focusing on price and reducing quality. Never was the phrase “beware of people who know the price of everything but the value of nothing” more apposite.
For years, many marketers have talked about and increasingly believed that brand differentiation is almost impossible. The result is where we are today, effectively a self fulfilling prophecy.

One brand that has reversed this thinking is Fever-Tree mixers, which has been built on a simple strategy – why waste a premium spirit with a poor quality mixer? And the principle of putting value back can be applied to a wide range of other markets too. So at a time when many markets are faltering, with declining volume, and the main corporate response is cost reduction, identifying sources of growth is rewarding both financially and also internally in motivating staff.

The Need for Change
The need is to challenge the false assumptions behind the focus on cheap and identify where and how value can be added back. And there are many examples where such an opportunity is clearly visible.

For example, owners of premium cars and tyres: if you have invested in purchasing a premium car marque, such as a Mercedes, why then purchase cheap tyres? After all, the wheels and, therefore, the tyres connect the car to the road and play an important role in safety, ride and performance. Other examples include, socks and shoes, bread and sandwich fillings, flowers and insecticide, and a high end golf club and a golf ball.

If someone is committed to a main purchase that can be described as a premium brand and accordingly costs more, any product that is purchased which affects the main product’s performance should also be ripe for selling a premium offering. It’s quite simple, ensure that you get the value that you have bought into with your main purchase by spending a little extra on the right associated products.

A critical part of the challenge is understanding the purchaser and the substantiation and expression of the superior brand. In other words the benefits. Obviously, this must be based on a product that does actually deliver. It’s about brand substance and not hyperbole.

Taking the car example a little further, tyre retailers always use the car registration to generate a list of options either in descending or ascending price order. So contextualizing and selling a premium offering is made difficult. But what if you added value into the service and so made a
premium recommendation both feasible and indeed a good customer experience? The route to this is to fit the recommendation to the customer’s needs, by finding out what requirements the customer has – from heavy mileage to safety concerns. Add in appropriate content and you have an opportunity to increase the transaction value and have satisfied customers.

If you would like to find out how you can leverage the Fever-Tree effect in your business, please get in touch.

Jonathan Spence
October 2020