TheMarketingSite.com

Knowledge Library

Leading with Price Will Kill Your Advertising, Branded Offers, and Ultimately Your Company

Advertising and Promotion

This material is drawn from Dan Hill's new book "About Face: The Secrets of Emotionally Effective Advertising," October 2010, Kogan Page.

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 crashing down.

By Dan Hill � President: Sensory Logic

About: Dan Hill is the founding president of the research firm Sensory Logic, Inc.,  (www.SensoryLogic.com) and the author of Emotionomics, chosen by Advertising Age as one of the top 10 must-read books of 2009. His latest book, About Face: The Secrets of Emotionally Effective Advertising is likewise available from UK publisher Kogan-Page.

Dan Hill is always available to discuss market research, branding, marketing and related issues.


Contact: VISIBILITY - Len Stein � Mobile: 914 527 3708 Lens@VisibilityPR.com

Share The Knowledge
The Future Of Advertising

Advertising and Promotion

Net#work BBDO and Sinister Studio’s are applying technology to advertising in ways that have never been seen before.

Share The Knowledge
Breaking our attachment to traditional advertising

Advertising and Promotion

The idea that brands are underspending in digital is a common assumption that needs to be tested. Some brands are already spending a huge portion of their marketing budget in digital, and this is growing

Share The Knowledge
Why Ad Blocking Isn’t the End of the World

Advertising and Promotion

The industry as of late has been abuzz with the pending ad blocking apocalypse. Reactions have been mixed: some publishers are indifferent while others think the sky is falling. However, publishers shouldn’t panic just yet. This latest round of ad blocking doesn’t spell the end of the digital advertising world.

Share The Knowledge
Content, Content, Content

Advertising and Promotion

Do people pay attention to ads anymore? I seriously doubt it! We have seen the average click through rates on digital banners decreasing by more than 60% in the past ten years and ever more declining day-after recall rates for TV advertising.

Share The Knowledge
Effective marketing is as simple as EMM

Advertising and Promotion

Effective marketing is becoming more and more of a challenge these days, because the customer is well-informed, interacts through multiple channels, uses their peers as a primary information source and wants the best customer experience possible.

Share The Knowledge