Why tech's biggest brains must stop focusing on discounts
A view from Craig Mawdsley

Why tech's biggest brains must stop focusing on discounts

Giving people a fat discount for buying something today that they would have happily paid full price for tomorrow is bad marketing, says Abbott Mead Vickers BBDO's joint chief strategy officer.

I may be old fashioned.

It’s entirely possible.

But I think I would prefer to think I have been well trained.

When I learned about brands and marketing, I was taught that one of the most valuable things they can do is to help justify a price premium.

The intangible value they create means that people will pay a bit more for them.

That value used to be created through advertising.

And that’s not so much the case nowadays.

But the value is still created, through design, through service and experience, through the intangibles that you can’t put a price on.

The avatars of the new economy will tell you that brand is a poor strategy nowadays, and that the Amazon driven age of perfect information makes it impossible to pursue brand as a strategy to build price premium.

Yeah, right.

Tell it to those crazy old fashioned luddites at Apple.

But there’s something strange going on in the world of marketing.

Smartphone 'revolution'

Nowadays, it’s common to see speeches at conferences or read articles, or reports, or be in meetings with the consultants or entrepreneurs who drive the mobile economy.

They evangelise about the smartphone revolution. They rightly point out that for many of us (maybe even most of us), our world is seen through a screen, mediated by the glowing rectangle we all carry, all the time.

And then they get onto the miracles this can drive for marketing.

We can serve people personalised offers.

When they’re walking past your shop, we can offer them a discount.

When they’re in your competitor’s store, we can give them money off if they leave and come to your store instead.

Is that it?

Is that all these avatars have to offer as a "for instance" of what their technology is capable?

Often it is.

The internet seems to think that the only reason we’re here is to get people to do something today that they would have done at full price tomorrow

All that technology at our disposal and the best the big brains of the tech revolution can offer us as a marketing strategy is a discount.

The internet seems to think that the only reason we’re here is to get people to do something today that they would have done at full price tomorrow.

As though we were in the Weimar Republic and money will be worth 20% less tomorrow than it is today.

Sure, if you’re selling sushi, and it’s late in the day, then maybe it’s wise to ring the bell and offer people a discount. You really don’t want to be selling it at all tomorrow. It might even be illegal.

But for most of us, it’s might be a better strategy to hold the stock and sell it at full price instead.

This isn’t what we’re here for.

We’re here to sell things at full price.

Because if you have to offer someone a discount, you either got your price wrong in the first place, or you’ve built a dumb product.

This isn’t mobile marketing 2.0, this is the kind of thing that would have got me chucked out of business school.

So why don’t we do something different?

Send those big brains away and ask them to come up with some examples of how their powerful technologies would add value if they weren’t offering discounts.

Because marketing deserves better than that.

Craig Mawdsley is joint chief strategy officer at Abbott Mead Vickers BBDO