Premiumisation is a nuanced concept to understand. The simplest way to define a premium product is by its price, but this is not the experience of premium value.

Premium is a distance: the distance between what a consumer pays and what they feel they get – and a brand becomes premium when perceived value exceeds price.

This is increasingly critical as consumers are becoming more literate and picky about what they spend their money on. They are willing to pay more but increasingly want reasons to do so, which may not always stem from a superior attribute or a higher price point. These reasons could lie in relevance, convenience, personalisation, trust, or even feeling the experience has made them feel better.

Relevance can be a bigger driver than many features. A product that serves a purpose that matters more to a certain consumer than others creates value. The question for brands therefore is not always “What more can we add?”, but “What matters more to this consumer?”

Personalisation builds on relevance and offers a tailored experience so that a product feels more relevant and is perceived to have more value. Nike By You is a great example of this principle, as is how Netflix recommends shows to users. Relevance done right means consumers are less price sensitive.

Convenience is another value proposition that drives premiumisation and is somewhat difficult to quantify in conversations, but rewarding nonetheless. Saving time, minimising effort, reducing complexity and decision fatigue can be powerful enablers. Uber is a prime example – the value extends beyond the transportation provided; it is the convenience and reliability offered as part of the experience.

Emotional and identity value is an important consideration in some categories. Some consumers purchase products not for their utility but for what they say about them. Apple has captured tremendous value by associating with design, experience and identity, while Royal Enfield has built emotional connections with its consumers around individuality and a sense of community. The brand offers an experience of belonging, which resonates with its consumers.

Trust enables premiumisation for some consumers. Consistency, provenance, reliability and reduced risk are important enablers. Consumers here are essentially paying for confidence in their choice. Brands such as Tata and Toyota have leveraged this to their advantage.

Lastly, experience enhances the value of the product offering as seen in the Starbucks example. Creating an environment that enables a 'third space' adds to the perceived value of the coffee purchased.

Premiumisation is an interesting bar to cross and, once crossed, becomes the new normal. Fast delivery, personalisation and convenience are examples of features that were once premium but have since become expected. It is therefore a moving target, and brands need to keep challenging themselves on what can differentiate them and the value they offer.

For premiumisation success, simply raising prices or adding more features is unlikely to suffice. Brands should think about what the consumer actually values at any given moment and how they can enable it, which could range from saving time to reducing uncertainty.

Ultimately, the best premiumisation levers are those where the consumer does not feel they are paying more, but rather that they are getting more.

The author is brand and CX strategist and founder, Darshana Shah - Advisory & Consulting.