smol thoughts: premium use-cases > premium customers

I often hear (and have used) ‘premium customers’ as a way of describing the audience/customers of ‘premium’-seeming consumer brands and products. In these cases, premium customers is used as a proxy for saying ‘customers who have the discretionary income, taste and prowess to spend on premium priced goods.’

When we use prefixes like ‘premium’ for our customers, we incorrectly assume that this attribute (premium) is consistent across this customers’ purchases. Put in another way, just because a customer has the cash-money to spend on premium-priced products, doesn’t mean they’ll consistently choose to do so.

A framework more interesting than customer persona attributes, is choice attributes- and in the context of this post, it’s building for premium use-cases i.e. use-cases that warrant or trigger a consumer to go higher up their premiumization index. Examples of premium use-cases include but aren’t limited to things like Family Holiday or Honeymoon hotels (Six Senses is a great case-study here); a cab that predictably reaches in 5 minutes (aloha, Uber); Beauty products that are rooted in problem-solutions (Drunk Elephant, The Ordinary); Popping the question (a use-case Tiffany’s crushed) and wanting to own real/authentic jewellery (Mia by Tanishq being a brilliant example here.)

‘Premium use-case’ as a framework does 2 things:

1. It makes business GTM and marketing much more interesting problem-statements to solve for, vs merely appealing to the income level of prospective customers. We’ve seen the best examples of this in categories like Beauty and Fashion- where building vocabulary (Squalene / Hyaluronic Acid et all) is used to signal the premiumness of the use-case. Consumer tech brands that lean on ‘trust’ and reliability as a lever to drive premiumization of choice- the most obvious examples being Cred in FinTech and Urban Company in Services- are also articulations of this.
2. You broaden your customer TAM. I think Social (the resto-bar chain by Riyaaz Amlani) is a great example of this- it appeals as much to a 21 year old earning 40K a month as it does to a group of 30 year old Googlers. Most sportswear brands are also fantastic references for how you can broaden your user beyond your core if you build for a premium promise vs for a persona. Blue Tokai is another wonderful example in this segment- appeals to coffee snobs with as much chutzpah as it does to coffee noobs.

Justifying everything- price, distribution, scale of business- becomes 10x easier when you build for use cases/triggers/occasions that command premiumisation of customers’ choices.