Your company needs to provide products that deliver on their promise, not flashy prices that offer short-term contentment.
What's the first thing that comes to mind when you think of Harvard University? What about a Lexus LX? Or a Kate Spade handbag?
While these items carry hefty price tags, your first thought probably had to do with the image of each brand. You likely thought of Harvard as a place for smart, ambitious people. You associated the Lexus LX with a smooth, luxurious ride. You considered the Kate Spade handbag good quality.
Many companies get caught up in promoting their products' prices - simply because they don't have anything else to talk about. That's a good indicator to go back to R&D and build more value into what you're selling. If your product provides value and you're still focused on price, you need to be in a different profession.
Pricing can sabotage your marketing - and your company's bottom line.
Making a Connection
Most salespeople will tell you one of their biggest challenges is price. But if you ask your top salespeople, they'll say price isn't a problem at all; these people are skilled at telling stories. Storytelling is important because if done correctly, it inspires emotion in listeners. Consumers buy based on emotional decisions, and we're doing nothing to connect with them emotionally when we focus on price.
Emotions function as triggers; they drive people to take action in the buying process. Price appeals to the logical part of the decision-making process. But if you truly want a customer to act, you have to get her to shift from needing your product to wanting it.
Getting in Their Heads
If the logical argument for price is hard to resist, consider this: your brand is competing against many others. With so many options, if you don't fire people up the moment they land on your advertisement, you've probably lost them to the competition.
The cost of a product only carries significant meaning if a consumer purchases it regularly. Without a consistent purchasing pattern for a product, customers have no context for price. That means you're preaching to a choir that finds your sermon irrelevant.
Price is usually not in consumers' top three factors for consideration - it's usually somewhere in the middle to the bottom of their lists. In fact, a low price is the primary driver in a purchasing decision only 15 percent of the time.
So it may come as no surprise that word-of-mouth marketing rarely celebrates low prices. While the low price a customer paid is fun to brag about for a week, the story that lasts is the satisfaction she gains from owning the product beyond that.
Browse the reviews on Amazon to see how many reviewers are talking about the prices they paid vs. the ones talking about their experience with the product itself. Which one means more to a potential customer? The latter, every time. Your company needs to provide products that deliver on their promise, not flashy prices that offer short-term contentment. Price-driven marketing strategies can be good to swing the door, but they won't deliver long-term benefits.
Doing It Well
A gut reaction to moving away from the price discussion is, "We can't do that with our product line in our market." In reality, companies do this every day.
If you visit a Mercedes-Benz dealership, the salesperson won't focus on price; nor does the brand's advertising. When the 2008 recession caused other companies to market their ability to help customers pay for the cars they were selling, the company opted to focus on its cars' technology and "value story." The brand wanted to focus on what it was, not the environment it was functioning in.
Apple has never made cost the center of its marketing, but it's started to use price as a long-term investment strategy. The company realized that someone who buys a cheaper iPhone model isn't a lost upsell; instead, the person has now "bought into" the Apple ecosystem and will likely become a repeat customer once she's adopted the technology. By continuing to advertise the features but simply offer cheaper models, Apple is creating desire in its customer base and increasing retention. If price was the only conversation it was having, the impact would be limited and end up hurting its brand.
Combating the Urge
How did Apple and Mercedes-Benz do it? Their messages are all about the quality, the value, the fun, and the joy of owning them. When you approach the consumer that way, you earn the right to minimize the price conversation.
Here's how you can do it:
The more you ask your customer base to consider your price, the less headspace they have to consider your value. Put your money on what really matters most to your customer because she's telling you it isn't the price - and it's what will make you money in the end.
Image on home page via Shutterstock.
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Mark Quinn is a Segment VP of Marketing with Leggett & Platt and has more than two decades of experience. Quinn writes a bedding industry and marketing blog called Q's Views.
Hong Kong, May 5-6, 2015
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