We have no intention of becoming PR's version of the Packard

Al Ries, marketing, branding and positioning guru extraordinaire, has penned a most fascinating opinion piece in a recent Ad Age.

The Ries piece (I couldn't resist) warns such marketers as Starbucks and Cadillac to stop cheapening their brand before it's too late. Ries says the long lost Packard automobile did just that and died as a result.

Prior to The Great Depression, says Ries, Packard totally dominated the U.S. luxury car market. In fact, Cadillac was little more than a distant blip in Packard's rear view mirror. But, when the downturn came, Packard developed a much lower cost alternative. The cars sold well. But, when the economy rebounded, newly affluent Americans went with Cadillac, which had remained true to its high-priced, high-quality roots throughout the Depression. Packard never recovered and eventually disappeared altogether in 1957.

Now, fast forward to today. I see lots of commentary in the PR and advertising trades from agency leaders who are suggesting that others follow their lead in cutting billing rates to 'ensure ongoing business and demonstrate value.' I see other 'leaders' offering 'lite' versions of their positioning, media training and media relations services or charging $500 per press release. I think such 'strategies' scream desperation and cheapen an agency's brand.

I think, instead, we should be providing additional value by being more creative, getting closer to our clients' customers and helping our clients fight the good fight when their purchasing, finance or legal departments suggest wholesale marketing cuts.

Cheapening your brand by lowering your billing rates or giving away your services in "a la carte" menu style will cause you huge headaches when the economy rebounds. And good luck convincing your clients that you deserve a rate increase just because other vendors have increased theirs.

We all have to endure budget cuts. They're a fact of life. But offering the PR version of instant coffee a la Starbucks or a Cimarron a la Cadillac is a penny-wise, pound-foolish strategy. (And Cadillac's mistake of the 1980s was all the more dumbfounding, considering that it defied the very strategy that made them a big name brand coming out of the Depression.)

The good times will return. Maintaining one's position as a high quality service provider during the downturn will ensure a swifter return to heady profits in the days to come. We, for one, have no interest in becoming our industry's version of the Packard.

Comments

[Michael D.]

I think the key is offering prospective clients a price/value they have rarely (if ever) seen, and, as Michael Corleone once said, can't refuse. That doesn't mean offering discounts on current services. It's packaging a suite of services at a value that guarantees a strong ROI. Idealistic? Yes of course. But let's remember one of 2005's most successful cars - the Ford Mustang, which celebrated key elements of the 1964 model, while offering 4 passenger room, modern gizmos/gadgets, AND promising consumers they wouldn't pay more than $19K fully loaded. A great product, "new" while celebrating heritage, at a win-win price.

[RepMan]

I totally agree, Michael. But, the magic in what Ford did was staying true to the Mustang's original price points. The mistake Starbucks, Cadillac and numerous PR firms are making is to cheapen their previous images by offering lower cost, 'lite' alternatives.