For the uninitiated, VidAngel helps families enjoy a variety of movies and television shows by eliminating questionable content. The service allows customers to choose what they want to see or hear when watching a film. VidAngel’s slogan is, “Watch movies however the bleep you want”.
It’s a pretty smart service. But what I really love is the marketing.
Before getting into the specifics of horizontal vs vertical brand positioning, let me start with some examples.
Since at least early 2014, Esurance has been running a new campaign with the tagline, “7 1/2 minutes could save you on car insurance.” And although the Beatrice ad does amuse me, I want to explain why the thinking and strategy behind these ads are flawed.
But to do that, we first need to talk about impotence.
The service dominant logic (S-D) approach came about in 2004 and is a fantastic principle for marketing a product. There is a whole feast of information available to read so this is a concise guide to help you get to grips with it.
The S-D logic requires you to treat products as a service offering. Instead of seeing your product as a simple cash exchange, you must view it as a tool to support a service that will benefit the customer.
In economic terms, disintermediation means to cut the middleman out. For example, consumers buying stocks directly through E-trade or Scottrade is a disintermediation of stock brokers. As a result, the intermediary loses business.
I’m going to extend/tweak the scope of disintermediation to cover branding.
Brand disintermediation is the art of cutting your brand out of the middle even though you may still be earning income in the short-term. In effect, these 3rd parties are stealing your customers while you watch (often because you gave them permission).
Here are three companies that are doing an excellent job at taking brand loyalty away.
One thing that I’ve learned from Living Social and Groupon is that my wife shouldn’t pay more than $99 for laser hair removal. Typically, it costs $600-$800 per area. However, I usually see a $99 deal once or twice a month. So we never expect to pay more than $99 as long as Groupon is still in business. For us, the value of laser hair removal has been permanently reduced.
The same problem occurs for a lot of businesses. Being featured at 50% off teaches customers that the reduced price is what they should expect to pay. I think that’s one reason you see the same companies offering deals month after month. They have to because that’s what consumers now expect to pay.