Why ‘good enough’ brands are often better

Profound shocks to the world, bring shifts in social norms and value systems. Since the Global Financial Crisis we have been transitioning from an age of plenty to an age of adversity, with this has come a major change in the way we perceive value and in our perceived needs.

The movers and shakers of the business world have responded with rise of frugal innovation. Frugal innovation is not about just knocking off a few features and benefits to create vanilla version, nor is it about cutting out vital organs of  brand value. Frugal innovation is about becoming hyper focused on and only doing, the things that matter. Frugalism is about a cost base of 40% to 60% cheaper products that are easier to use and deploy. When perceived value is lower, as is often the case with frugal brands, customers do not want to invest too much time integrating the product in their life, they just want it to “do what they want”, without having to think.

The top end of town get it, Proctor and Gamble, Renault Nissan, Siemens and Unilever have all integrated frugal innovation into their business. ‘Frugal’ism has become a basic design tenet of the business, inspiring the creation of a whole new range of products and services that meet the needs of a significantly resource strapped market segment. Siemens have created a philosophy of frugal innovation known as SMART, Simple, Maintainable, Friendly, Affordable, Reliable and Timely.

Inspired by Indian car manufacturing, Renault Nissan have introduced Dacia http://www.dacia.co.uk, a car that has been designed with affordability in mind. Like many companies, they have chosen to deliver the “frugal” products under a different branding than the premuim range. This is critical, as the underlying brand values for frugal and premium are  significantly different, and failure to do so can cause damage to the premium brand, and confuse both the premium and frugal segments.

While the  premium customers and the frugal customers are different segments, it is important to remember that the premium customer is not necessarily a high socio economic profile and conversely, a frugal customer is not necessarily a lower socio economic segment. With the changing value system post the Global Financial Crisis, ‘good enough’ is a choice. “Good enough” is about focusing on the things that matter. By buying frugal in one category we can invest in the things we really want in another. For instance many well heeled customers, like myself, see cars as an A to B commodity, not a trophy and a fashion statement.

We are also seeing an association between being frugal and environmental consciousness. Having “good enough” is also a statement about the dangers of excess, especially when excess comes at an environmental price. CEO of Unilever, Paul Polman is well aware of the link between frugalism and environmental consciousness. Unilever a frugal innovator aims to double its revenue by 2020 while simultaneously reducing its environmental impact by 50%.

In these times where frugalism is becoming a competitive advantage, it is important to question how this can be exploited in your business. This is not a dumbing down of products and services, but it is about having piercing insight into the things that matter. Take care, use qualitative insights, only by really knowing your customer needs can you “zen” your customer proposition into the competitive advantage of frugal innovation.

Louise Kelly

Managing Director

Hearts and Minds


Founder Thought Leaders Circle


4 thoughts on “Why ‘good enough’ brands are often better

  1. I like that you pointed out that just because someone is frugal with their purchasing, it doesn’t mean they are lower down the socio economic ladder. Just because someone chooses a cheaper option, doesn’t mean they are happy with an inferior product. I think these economic changes are a good thing- people might think twice about making a purchase and when they do, choose quality and longevity over frequent purchases.

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