Pricing For Success

I always like hearing that old saying, ‘we don’t mind if our competitors undercut us, they know the value of their product’.

In Australia , retailers in general have trained customers to focus on price. What self-respecting shopper pays full price today? They bide their time. They seem to have a sixth sense that tells them when bargains will appear.

Even most of the so called ‘loyalty programs’ are essentially nothing more than a lightly veiled discounting program.

Yes, if you live by price, you can just as easily die by price. There will always be someone who can go lower . This ‘someone’ may not have a business for long, but they can do lots of damage to other market players before they go under.

It is a strange fact that almost invariably, particularly in business-to-business, it is the seller who has more concern about price. There are exceptions, but mostly the buyer is looking for value. He or she is going to part with perfectly good money. And what does the buyer want to receive in return? Yes, that’s right, the answer is: VALUE.

And it is for this reason that, as marketers, we should be more concerned about adding value.

The ideal way of adding value, is including something in the package that does not cost you much but has real value for the buyer. A restaurant might offer a free dessert. A carpet cleaner may leave the householder a small bottle of ‘special formula’ stain remover. A consultant might offer a free copy of some survey results.

In all these cases, so long as the ‘added value’ is relevant to the buyer, it renders the overall price less critical. (Obviously, if it is not relevant, it is not added value).

Adding value may not always be easy. It may require imagination. But innovative packaging of value is an important element of marketing. True marketing professionals do it instinctively.

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