How to Create Value Out of Something Completely Useless

What’s the greatest trick a marketer’s ever pulled?

Diamonds.

You see, about once a decade or so, the marketing world strikes ‘gold’ with a one-liner that is truly life changing.

No, really.

I mean in the sense that this line, this one tiny piece of copy, triggers a shift in the psychology of the masses. Lines such as ‘Because I’m Worth It!‘ from L’Oreal – that suddenly permitted women to shell out the big bucks for beauty… or ‘Think Small‘ which entirely redefined what we wanted in an automobile – thus putting Volkswagen on the map. Actually, the rarity of such snips of genius cannot be clearer than today – as we watch Volkswagen’s cataclysmic off-road veer. Do anyone really think one brand could ever score a home-run like that, twice? My guess is no, and that they’ll never quite recover. So this sort of marketing is in a big sense ‘life changing’ because it changes our intrinsic behaviours and makes us re-evaluate what we use as status symbols, and how we measure them… at the very least until the brand screws up on a cataclysmic level.

So, what’s that have to diamonds?

Well, I hate to say it, but only reason you may be looking down at a coveted gem right now (or planning on forking out for one) is precisely that. Diamonds are coveted. And that is entirely in and of itself the reason you own one. They really are a fascinating case study in the madness of the human mind. You see, the normal rules of scarcity – in that an item of limited availability increases in value in a demanding market – simply do not apply to diamonds. Jade, Tanzanite, Benitvite, Opal, Musgravite, Alexandrite and Red Beryl are just some of the many precious gems that are rarer than this famed stone. In fact, even gold nuggets are rarer these days – ten times rarer, on a volume by volume bases. So when Marilyn Monroe commented in Some Like it Hot, “Real diamonds?! Why, they must be worth their weight in gold!“, maybe she wasn’t being all that thick headed after all. Diamonds are a classic economist’s nightmare.

So why all the madness over diamonds? Why do we, the smartest animals on the planet covet something that costs an extortionate amount of money, that seems to be knocking around in plentiful supply and decreases by 50% in value once purchased. Why is it we believe diamonds are a girls best friend?

Because of advertising of course!

Seriously.

The only reason you may be wearing a beloved bling ring right now, is because a bunch of New York ad men from the 1940s told you so. Actually, to be more precise, the only reason any of you married or engaged people are wearing a ring of any kind at all, is because of De Beers – the company that still owns roughly 35% of the world’s diamonds today – wanted more people to buy more of them. And not just the rich and wealthy, but pretty much every single person in the Western World, at least once. Prior to 1947, it was actually pretty uncommon to buy an engagement ring – let alone have one of diamonds. In fact, most well to dos preferred to opt for more precious stones and metals, to show of a sense of both acquired taste and wealth. So De Beers took their classic “we’ve got all this pretty useless stuff that nobody wants to buy” to N. W. Ayer & Son… who in turn came back with the greatest re-positioning line of all time…

A Diamond is Forever

By taking the ‘unbreakable’ quality of the rock and tying it to the ‘unbreakable’ ideal of marriage, Ayer & Son tied the two together. Up to this point, this all may be old news to you but I’d like to throw one fresh thought into the mix – romantic ties was never why diamonds became an international success. The success came down to unquestionably tying diamonds to a ritual that almost everyone takes part in at some point in their lives. Why? Because ritual is prime territory for comparison. And any opportunity for comparison creates social pressures. By tying buying a diamond ring into something everybody already did, Ayer & Sons created a new set of habits for modern society. And when everyone in the world is suddenly all doing the same thing, we a primed to seek out the social markers that tell us who is doing it ‘better’ than everyone else and thus, ‘top ape’.

Unlike tanzanite, opal, aquamarine, rubies etc., everyone could estimate the value of a diamond with reasonable ease and therefore, compare. Armed with the four Cs husbands and wives around the world could now easily guess their economic worth and social status vs. them Jones in Number 4, down the road.

As the most sociable animal out there, humans love clear status signals. Because status signals tell us very clearly where we are in the world relative to everybody else.

De Beers, just gave them an excuse to create the most blatant status symbol going.

Advertisements

Comments...

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s