What Bitcoin Marketers Can Learn From Diamond Companies

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One of the biggest challenges for a crypto marketer is figuring out how to classify why the average person should be interested in buying some. For some people it’s a cheap and fast way to send money from one person to another. Others, it’s a hedge against inflation. For others, it’s a vehicle to generate a yield on your assets without a middleman.

All of these are legitimate value propositions. But when you have so many features, how do you summarize what you’re selling into a cohesive marketing message?

I was recently reading about the diamond market and the concept of “Veblen goods.” What is that? I’ll let Investopedia explain:

Reading that description you can pretty immediately draw some parallels to, say, Bitcoin.

• Demand increases as the value goes up

• When the value goes up, having more of it is increasingly perceived as a status symbol

• Inversely, when the price of a Bitcoin goes down, the demand (and price) also tend to go down

• Veblen goods are also marketed as being exclusive or limited in availability, much like Bitcoin’s 21 million cap

Let’s dig into this a bit further.

Start with this: Veblen goods contradict basic law of demand.

Consider the demand curve above. The tl;dr here is that as the orange line (demand) goes up, so does the price. At the same time, quantity demand of the item decreases because of the perceived price inaccessibility. There is an inverse relationship between price and quantity demand. However, as price rises, the “Veblen effect” kicks in and the standard law of demand no longer holds. This results in a positive relationship between the price of a good and demand for that good.

Or, as EconomicsHelp put it, some Veblen goods may have normal demand curve at low prices, but above a certain price start to have ‘snob value’ so demand curve starts sloping the other way, driving up price and demand and perception of quantity simultaneously.

Sounds a bit more familiar now, right?

This concept was named after the same guy who coined the term “conspicuous consumption,” so you can kind of see where this is going.

Where do diamonds fit into this? Well, diamonds are a Veblen good. So are yachts, fine watches, classic cars, and so on.

But the point I’m making here is that if crypto assets like Bitcoin fit the criteria of a Veblen good, then all of a sudden we have a roadmap for success. Half of marketing is good storytelling, and no industry is better at creating value out of non-rare assets like the diamond industry.

Here are some facts about diamonds:

1. Diamonds are not particularly rare. In fact, compared to other gemstones, they’re the most common precious stone found

2. Colored diamonds, which are considered less favorable, are actually more rare than clear diamonds

3. Diamonds are only associated with wedding and engagement rings because of marketing

Before the 1940’s the price of diamonds was cratering as the De Beers diamond company was building their near-monopoly on the global supply. They hired the New York–based ad agency N.W. Ayer to help change that trend. The campaign that they came up with has been used by the company ever since: “A Diamond Is Forever”

From 1939 to 1979, De Beers’s wholesale diamond sales in the United States increased from $23 million to $2.1 billion. It’s also a pretty interesting story, if you’re interested in reading more.

But the point is that this campaign changed western culture forever, making the idea of diamonds ubiquitous with marriage, proposals, and high-society.

When it comes to marketing, there are no unique ideas. It’s just a matter of taking a concept or strategy and implementing it in a new way. There is an opportunity for marketers to frame Bitcoin or other crypto assets as scarce, valuable, and high-quality goods for investing (or other) purposes.

Taking a closer look at the early successes of industries like the diamond industry provide us with some tried and true marketing, branding, and messaging concepts that might be a roadmap for making Bitcoin as much of a household commodity as a family diamond.

Something to think about.

Who’s Hiring Marketers in Crypto?

• Social Media Lead @ eToro US [APPLY]

• Content Marketing Manager @ Bitcoin IRA [APPLY]

• Digital Marketing Manager @ Kaleido [APPLY]

• Marketing and Community Lead @ Compound [APPLY]

• Director, Business Development @ Brave [APPLY]

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