Nowhere in marketing today do emotions run hotter than when it comes to
the role of (low) prices highlighted in advertising.
In boardrooms everywhere, one can imagine what's being said, we need to
make some money fast so let's lower our prices, and let everybody know.
So CEOs and CFOs carry the day while CMOs beats a quick retreat to let
the ad agencies know what to do.
Only it's a bad idea to lead with price in advertising. First,
discounting, especially repeatedly, isn't sustainable. One of the key
advantages of a sale is the element of surprise. How does surprise
register on people's faces? Their eyes go wide, the mouth falls open;
it's nature's way of saying: shut up, and notice the world around you.
Surprise aids stopping power in advertising, but surprise fades when you
use the reduced-price trick over and over.
Second, surprise is really a pre-emotion. It's brief (less than a
second) and followed either by the verdict of the surprise being
positive "wow" or a negative yikes! Repeating low pricing leads to
expectations of future low prices, desensitization, and the
impossibility of creating a wow response.
Shopper research has shown that seeing any price tag causes disgust.
Instinctively, people don't like giving up their money. So creating more
delight regarding the offer, generating allure that exceeds feelings of
disgust about surrendering cash, makes a positive purchase experience.
The problem is that a low-price strategy isn't about the offer's
intrinsic value; it's merely a desperate attempt to lower people's
disgust levels and, ultimately, given desensitization, is a losing game.
Third, a focus on prices is about numbers, statistics, and carries
people from right-brain emotional involvement in advertising to left-brain analytics. That's a bad trade-off, given that everyone feels
before they think. Results from the IPA's database of 880 marketing
campaigns has found that emotionally-oriented campaigns generate twice
as much profitability as traditional, hard-sell rationally-oriented campaigns.
Fourth, price-leading advertising creates quality problems for the
offer. Let's consider the value = quality/price equation. There, price
at least gives the illusion of being a benchmark for inferring the
quality of the offer. So what will a lower price do? It might help to
shape perceptions that the floating, undetermined quality of the new
offer is actually quite low, or that an existing offer was never worth
what people have been accustomed to paying. Put another way, cheap doesn't feel good.
Fifth, encouraging consumers to take a price-oriented, statistical,
rational approach to purchase decisions can have disastrous, unintended
consequences. That's because, contrary to popular opinion, our emotions
provide valuable insight. They steer us, given the conservative estimate
that 95% of people's thought activity isn't fully conscious, hence
intuitive and operating in the realm of emotion. To cut us off from the
wisdom of our emotions has led many a consumer to make a purchase
decision they soon regret.
Sixth, brand loyalty is at risk because pride takes a hit. Loyalty is a
feeling, and how is a loyal user supposed to feel when they see the
price is lower for everyone, not just them? Moreover, the company loses
twice over. Existing customers pay less for goods they were already
buying (and may not buy again at full price). As for new customers who
bought a deal, their loyalty is less real than the profit margin sacrificed.
Finally, seventh, a brand on sale is a brand with an integrity problem.
A key way we judge the trustworthiness of others and companies, is the
degree to which they behave consistently. With price-leading
advertising, a company's identity becomes fuzzy. Suddenly, you're either
a discount brand or are signaling a lack of confidence that, in dating as in commerce, is never very attractive.
Furthermore, leading with price suggests you have nothing else to say,
or show, in advertising. Price as your main attribute doesn't mean
anything. The marketing battle is fought in terms of price and
distribution. Loyalty ceases to be a barrier to entry, as surprise,
hope, and every other positive emotional dynamic required, comes
This material was drawn from Dan Hill's book About Face:
The Secrets of Emotionally Effective Advertising, Kogan Page, October 2010,