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Welcome to the Owl Street Studio podcast where we look at how marketing and design affect the unexpected areas of our lives.
Today we’re continuing our series about marketing and your emotional needs, and today we’re looking at how your emotional needs influence what you think is valuable and what you think is cheap.
But first, if you missed our previous episodes, here’s a quick recap. To start, your needs are any resource you literally need to survive. On one side is external needs. These are physical, tangible resources like food, shelter, and water, and on the other side is internal needs. These are things like happiness, social connection, and self-actualization.
Next, it doesn’t matter what a business makes or what services they provide. All businesses only sell two things. They sell an external need and an internal need. (And to hear more about that, check out our previous episodes here and here.)
Then, businesses communicate these needs through their marketing, specifically through their selling points. Selling points are what businesses say to convince you to buy their stuff instead of someone else’s. Businesses use external selling points to communicate external needs, and they use internal selling points to communicate (you guessed it) internal needs.
But what’s the difference between external and internal selling points? Well, external selling points are all the things that are outside the product or service. These are things like price, quantity, features, and physical characteristics. For example, Tide with Oxi Boost, Tide with 25% more loads, and Tide for just $9.99 are all external selling points.
So external selling points are all things outside a product or service, and internal selling points are the exact opposite. They’re everything that’s abstract and hard to quantify about a product or service. These are things like emotions and social norms. For instance, whenever you see concepts, subtext, and subtly in marketing, you’re dealing with internal selling points. For example, when Olive Garden says, “when you’re here, you’re family” they’re using an internal selling point.
So now that we’ve got that recap out of the way, let’s go back to your needs. Let’s take your two groups of needs, external and internal, and think of them as a spectrum. Food and water is on one side of the spectrum, and contentment and self-actualization is on the other.
Now, when we lay business branding on top of this spectrum, we reveal another spectrum: commodity to luxury (or cheap to valuable). But…for that to make sense, we need to explain branding.
Now, branding and marketing are like peanut butter and jelly. They go together so often that we basically think of them as the same thing. However, even though they’re used together, they are two separate disciplines and concepts.
Said simply, marketing is conversations, and branding is presentation and reputation. In other words, branding is how you look and how you sound and how people think of you. In fact, you, yes you, you have a brand. You just don’t call it that. Instead, you call it your reputation. And just like you think through what clothes to wear to best present your personality to others, businesses also think through their presentation in order to create a distinct personality in people’s minds.
For example, is Taco Bell quiet and reserved? Or are they loud and youthful? Is Apple pragmatic and traditional? Or are they elegant and trendy? Now how Taco Bell and how Apple use branding to create their personality is for another episode. So for right now, just know that the words “branding” and “brand” basically mean the same thing as personality and reputation.
But what does all of this have to do with your needs, value, and marketing? Well, one way a business creates their brand is through their selling points. A business shapes its reputation in part from what attributes of their products and services they chose to highlight and which ones they chose not to highlight.
See, some businesses only use external selling points. They only focus on price, quantity, and things like that, while other businesses do the exact opposite. They only use internal selling points and only focus on emotions and social concepts. But what does this have to do with their branding and reputation?
Well, in short, focusing on external selling points makes a brand feel like a commodity, while focusing on internal selling points makes a brand feel like a luxury good. In Economics 101 terms, commodities are basic products like soap, table salt, and socks, and luxury goods are things like Rolexes, Mercedes, and Gucci handbags. But we can think of these two terms in another way. We can think of them as different levels of assumed value.
Typically, in the context of business and marketing, when we hear the word “value,” we picture a dollar sign, but really, value is an emotion, not a price. To be fair, things perceived as higher value (ie higher emotional value) usually also command a higher price. But you can buy an expensive thing that has little value to you, and you can buy a cheap thing that has an immense value to you. So though value and price often correlate, they are still two totally independent variables.
I know that was a lot, but all of that helps explain what we mean when we say cheap and expensive. Cheap is low emotional value (not a low price), and expensive is high emotional value (not a high price).
So, how do you increase something’s emotional value? It’s easy to increase a price, just put a new sticker on it. But how do you change someone’s emotions and feelings and perceptions?
Well, one way you can change it is by changing the need. External needs relate to low value, and internal needs relate to high value. So you can change something’s emotional value by changing which need you highlight.
For example, a grocery store seems like the ultimate, cheap low emotional value brand. I mean a grocery store literally sells nothing but actual commodities. What emotional, internal needs could a grocery store possibly appeal too? Well, what about Aldi?
In my opinion, Aldi has done one of the most impressive rebrandings in modern history. In just a few years, they completely shifted public opinion and created a completely new reputation for themselves. And one way they did it is by changing the need. They shifted from only using external selling points, from only talking about sales, prices, coupons, and bulk quantities, to centering emotional, internal selling points.
Yes, Aldi runs sales and yes they do promote their lower prices, but now they focus on something totally different. Their stores aren’t cheap anymore. They’re trendy. They’re sophisticated. They’re White middle class, not poor anymore.
Today, you go to Aldi because you want to FEEL like a savvy, sophisticated shopper. And Aldi’s prices don’t matter. What matters is the FEELING they give you. What matters is their emotional appeal.
In fact, I personally priced compared Aldi to my other local grocery stores. I bought the same things at both stores and saved both recipes to side by side compare the prices. And I found that, on average, Aldi cost more.
But I know lots of people who drive out of their way to shop at Aldi, and they say it’s because Aldi has better prices. However, I know that’s not true. So what is it? Why do they have such brand loyalty to Aldi? Because of FEELINGS and emotions.
Aldi appeals to people’s internal, emotional needs for social status and self-esteem. And when Aldi radically switched needs like this, they simultaneously radically boosted their brand’s assumed value. They went from cheap to luxury.
So if you run a business and you want to boost your value, check which selling points you’re using and which needs you’re appealing too. Are you appealing to people’s external, physical needs? Or to their internal, emotional needs?
And whether you run a business or not, to see this in action, go through all the brands you buy. Which brands do you think are high value and which do you think are cheap? Then check what needs do each brand appeal too. Does the cheap brand only promote prices, sales, and coupons? And does the valuable brand promote emotions, statues, and more? No matter what, I guarantee you’ll be very surprised at what you find out.
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