I recently read Trading Up by Michael J. Silverstein and Neil Fiske. The book details the current trend of consumer spending and reveals that many middle-class Americans are purchasing “luxury” brands for their everyday items. Needless to say, the book intrigued me. I’ve seen it in my own life. I grew up in a standard middle-class household in the 1970s. We had a regular washer and dryer – probably Westinghouse or something and definitely were not trying to keep up with the Joneses. It seems like that’s changed and we now live in the age of “Owning the Best, the Soonest.” But why do we live in this age I wondered.
As the authors describe it, consumers now demand more and companies are responding in kind. Various cultural factors have contributed, though most importantly perhaps is the economic boom of the early 1990s. It was this event that provided the impetus for companies to crank out greater numbers and varieties of products, and when fueled by globalization and a shift in consumer marketing, led consumers to seek more status-driven products.
Take the old Westinghouse washer and dryer for example. It came in white or maybe avocado green. The machines were square, not particularly attractive, and hidden away in some basement or tiny laundry room. Sure, it occasionally got out of balance and made a huge racket or shrunk your sweaters, but it was functional and that was ok. And we were ok with that. However, the standard washer and dryer as we knew it became a luxury with the advent of GE’s front-loading machines (that actually looked pretty elegant.) The new front-loaders came in designer colors to match your décor and had dozens of more options! It seems like GE picked up on the emerging trend in our purchasing habits and created an item that was stylish, pricey, AND a must-have.
But after reading the book, there was something I had to wonder: How can this knowledge be applied to B2B companies?
B2B companies are not excluded from trading up trends. Customers of all kinds expect more now. They are educated by their experience and by information they find online and don’t settle for “fine” results from their partners or vendors, especially when it comes to technology. They too, want the best.
Are you enabling your customers to “trade up?” Do you position yourself as a “luxury” brand, with special features or offerings that customers never realized they needed until you offered it? Offering yourself as a trade up means differentiating yourself from your competition, but it is risky.