Move From Brand Bystander to First Responder: Recent Episodes
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A lot of brands see a minimum advertised pricing (MAP) or unilateral pricing (UP) policy as the best way to correct price discrepancies and protect their margins. But creating a pricing policy is only part of the solution. And if you execute it poorly, a pricing policy can actually do more harm than good for your brand—because it puts your integrity under scrutiny.
Anthony Capozzoli lends his ecommerce expertise in the PriceSpider Ecommerce Connected podcast with Bill Johannesen, founder of Vision Werks and one of the chief architects of Bose’s well-known unilateral pricing policy, to discuss common misconceptions and challenges surrounding pricing policies, and explore the solutions that have worked for brands like Bose.
“Implementing a MAP policy’s either the best thing you ever did for your brand or the worst,” Bill says. “There’s no middle ground on this.”
Here’s why. It’s only the playbook.
If you can follow and enforce your policy, it ensures every customer has the same perception of and experience with your brand, and your retail partners will respect and trust you. But if you expect your policy to take care of itself and you don’t enforce it, it quickly becomes meaningless—and it may cause retailers to distrust everything else you do and say.
Your pricing policy sets expectations, tells your sellers what to do with your products, and defines how you’ll respond to violations. It lays out the plays. But you still have to execute them. If you don’t follow the playbook, your retail partners won’t be able to take you seriously.
It may require you to make big changes
Right now, you may not have the distribution channels, supply chain, infrastructure, bandwidth, or budget you need to act on your pricing policy. Before you tell your sellers you’re going to hold everyone accountable, you need to be ready to actually do that.
One of the most glaring examples of where this often falls apart for brands is the Amazon Marketplace.
“Amazon, quite frankly, is a magnifying glass on the holes in your supply chain, on the holes of your distribution strategy, on the holes of your channel strategy,” Anthony says.
When you let anyone with a pulse sell your products, you may wind up with sellers who don’t even see your pricing policy before they start selling, numerous product bundles, sellers you can’t contact, and other issues that make it difficult to enforce your policy and stay true to your word.
It needs to be someone’s responsibility. If no one is in charge of enforcing your pricing policy, it’s simply not going to happen, and your policy becomes a meaningless document.
Anthony says, “A lot of brands I talk to are like, ‘Well, we don’t have anyone at all dedicated to helping us solve this problem towards MAP.’ Or, ‘We’ll let the intern do it. They’re here for a couple of months in the summer.’”
But this isn’t a “task” someone can do once and then ignore. Price monitoring is an ongoing responsibility. “It’s a process, not a project,” Bill says. If you’re inconsistent, your MAP policy does more harm than good
Brands often find themselves in a difficult position: numerous sellers are violating their pricing policy, but they don’t have contact information for many of them. So, they enforce their policy with the brands they can contact.
“There’s the retailer sitting there, you’re sending him violations, because he’s just trying to compete,” Bill says. “He’s just trying to look good to his customers that he’s not getting his butt kicked on your product in the visible marketplace out there. So, what’s he supposed to do?”
That seller doesn’t have much choice. Their competitors (whom you can’t contact) are going to continue violating your policy and beating them in sales. So they’re going to have a frustrating experience with you and they’re going to keep violating your policy to compete.
When consumers think of your brand, what kind of experience, quality, and value do they associate with your name? When your store or website is the only point of sale, you have a lot of control over your customers’ experiences. But when you work with retailers, that’s not always the case.
Every retailer you work with directly impacts your brand equity–for better or for worse.
In this episode of PriceSpider Ecommerce Connected, PriceSpider’s host, Anthony Capozzolli sits down with Bill Johannesen, founder of Vision Werks and one of the chief architects of Bose’s well-known Unilateral Minimum Resale Price Policy to talk about brand equity.
Here are some of the tips they have for brands.
Create a specialty product
While your brand equity encompasses far more than your product, your product is where it all starts. Having a specialty product that serves your target audience either in unique ways or better than anyone else gives you more power in your relationships with retailers. They want to sell your products because they know their customers want them–and if they don’t carry your products, they’re going to lose sales to their competitors.
If retailers feel like you’re getting more out of the relationship than they are, they’re not going to be as cooperative when you start trying to fine-tune how they sell your products.
Choose the right retail partners
Since every retailer impacts your brand equity, one of the most important things you can do to build and preserve your brand equity is to make sure you only do business with retailers who support your brand. That means both being selective about who you allow to carry your products and requiring your partners to sign a reseller agreement that formally defines how they need to support your brand.
Unauthorized sellers don’t care about your brand or your goals. They only care about short-term sales. And your pricing policy isn’t going to change their behavior.
If brand equity is important to you, you need to choose retail partners whose go-to-market plan aligns with your own, and who create the same kinds of customer experiences you want people to associate with your brand. Can you trust them to use your assets and messaging when they advertise and display your products? When a seller provides a bad experience putting your products in people’s hands, or creates a different perception of your brand, that hurts your brand equity.
Control the message
If you want consumers to have a specific perception about your brand and associate you with particular qualities, you need to control how your brand and your products are presented by retailers. You need tools (like Brand Monitor) to see how well retailers are following your brand guidelines, so that consumers have the same experience with and perception of your brand everywhere it appears.
Preserve your brand equity
Odds are, right now you have some sellers who are generating sales but hurting your brand. A lot of manufacturers are hesitant to get rid of these harmful sellers out of fear that they’ll lose sales. But Anthony and Bill argue that even when there are personal relationships involved, brands need to take the plunge and cut ties with these sellers. Not only are they holding back your brand equity, but they’re often actually decreasing your overall sales as a result.
Bill and Anthony have often seen brands quickly regain (and even increase) sales when they cut ties with bad sellers. This typically happens because those sellers were eroding trust in your brand and your credibility as an organization. You were associating your brand with low-quality sellers. When you cut ties with those sellers, you may find that your best retail partners are eager to pick up the slack.
There can be no half ass. Unlearn what used to work to apply and understand what the brand & retailer partnership needs today. Retailers who are investing in supporting your brand with their customer.
Coordinating internal activity precedes coordinating wholesale channels. Direct to Consumer is incredible first hand education on customer engagement! Where is retailer adding value? Where is product going? Each need to find right fit for customer experience. Strengths, weaknesses and value to brand.