Premiumization: How You Can Enrich Your Data to Rely Less on Discounts and Vouchers 

No brand wants to rely on discounted prices and continuous offers to keep sales coming in. For a business to be sustainable – let alone achieve growth – it must have a foundation of loyal customers willing to pay full price for their products or services. To break the reliance on offers, many businesses are finding success with premiumization. 

What is premiumization? 

In a nutshell, premiumization is the practice of increasing the perceived value of higher-priced products. It links the aspiration of luxury goods with the necessity of everyday items by positioning a product as premium within the category norms. Premium doesn’t mean Rolls Royce or Prada-level luxury items. Rather, it is trying to answer the question: why would someone with a limited food budget buy Heinz Tomato Ketchup over Walmart’s Great Value version? 

Cost is not the only customer consideration 

There’s no denying that product or service price is a large consideration in purchasing decisions but it is not the only one. As humans are naturally risk-averse, brand trust also plays a major role. If something works – if the whole family likes Heinz Tomato Ketchup and there are no arguments at the dinner table – and it works every time, why would they opt for anything else?  

Several factors contribute to brand trust but Edelman has narrowed the main three down to customer experience, product value, and societal impact. Is the brand helpful and respond quickly to issues? Does it align with and represent the consumer’s personal views and values? And, does it provide good value for money? Premiumization looks at the latter of these, seeking to increase a product’s perceived value for money to encourage demand at full price. 

Finding customers with high lifetime value  

Aside from raising perceived value for money, the other essential element of successful premiumization is targeting customers with high lifetime value potential. Identify customers who already see the value in your brand products and are happy to pay full price. From there, use machine learning tools to find more people just like them to bring into the fold. Machine learning can also predict the expected lifetime value of new customers to serve as a guide for marketers on which audiences to prioritize.  

Using Data Enrichment to enhance actionable insights 

Data enrichment is the practice of bolstering your first-party data with third-party data from external sources. There are many advantages to this approach – it allows companies to fill in gaps in their existing data sets, provides new perspectives and, possibly most importantly, gives vital context to your datasets. 

If marketing teams are not benchmarking their own customer data sets against the populace as a whole, they may be missing key characteristics of their HLTV customers. Contextualizing your data can help drive better decision-making around customer intelligence, resource allocation, and risk management. 

How to use data enrichment to boost your premiumization efforts 

Data enrichment can be the key to the success of a premiumization strategy – but only if it is done in the right way. Here are some top tips and best practices to keep in mind. 

Set specific data enrichment goals 

While marketers know what the end goal is, they must first identify the data needed to get there. Are they looking to create richer audience profiles and personas? Are they looking to add context to existing data? Determine the data requirement and how to action the new information. It is also worth making sure the data end users and the person acquiring the data are aligned so that the new data is fit for purpose.  

Consider potential data sources carefully 

There are a wide range of data providers on offer and choosing the right option for you can be challenging. Aside from ensuring that your data provider is complying with all relevant legislation, here are a few other factors to keep in mind: 

• How easy is it to use? Does it come with a precise search function or an intuitive dashboard? 

• Is it comprehensive? Can all your data needs be met from a single source? 

• Are samples and trials available? Can you evaluate data quality for yourself? 

Make sure it’s easy to ingest with your own data 

Before committing to one data provider, verify that the data will be delivered in a format that can be easily used and ingested into your own martech stack. How are files delivered and is this compatible with your own marketing systems? This is a crucial step to get the most out of your data.  

Make your premiumization strategy a success with Allant 

Behind every successful premiumization strategy is a brand that well and truly knows its customers. Who they are, what motivates them, and how to create brand experiences that appeal to them. To future-proof a brand, companies must retain loyal customers and attract new audiences that are willing to pay full price for products. With our comprehensive suite of services, Allant Group can help brands understand their audiences and steer them toward premiumization success.

Would you like to learn more? Contact US to discuss how we can help with your premiumization strategies.