Pricing Vs Value - Not All Peanut Butter is Created Equal
At Captivation, we have the distinct privilege of working with great companies - new and old, from all over the world and every walk of life. Each organization we help sells products and services vastly different from the next, but all however, share the same common mantra - love what you do, and find ways to make money sharing it with the world...
Connecting these brands with those ripe to receive what they are sharing is half the battle (that's where we come in) and the other half relates to something referred to as "buying signals". Buying signals are really anything that trigger the consumer to engage with your organization and ultimately purchase what you have to offer. Examples of buying signals include reliability, durability, existing reviews by others whom have already purchased from the business, as well as any other factor that stands between your business and someone clicking the "Buy" button.
While we're on the topic of buying signals, there's one very important buying signal that almost always plays a role (sometimes the biggest role) in whether you will buy or not - price. I say almost always, because for the right audience, sharing the right circumstances, price takes second seat to everything else. It's in the center of this Venn diagram that we find something more powerful than price - the true value of the offering.
To further illustrate the difference between price and value - let us think about a jar of peanut butter. Go on, close your eyes and envision the aisle in your local grocery store - all of the jars perfectly aligned to the front edge of the shelf with the labels displayed prominently. Now think of your favorite brand of peanut butter (everybody has one). Think about the size of the jar, is it the same size as all of the other brands (basically). Now think about price. Sure, your favorite brand may be a dollar or so more than the other brands on the shelf, but you don't mind paying that little bit more because... Because why? You might answer: "because it tastes better", "because it's the one I grew up with", "because the other choices are terrible". Together, we've just proved that value, does in fact, trump price. (we'll revisit this again shortly from a slightly different vantage point).
The Expensive Stuff
Now, let's talk about something closer to home for those in the agency world. When searching for a provider of website development, video production or social media management services, research has shown that the tendency from a client perspective is to be more anchored on price than any other buying signal on the list. Not that value isn't important, but hey, we're not talking about the $4.79 jar of peanut butter anymore - we're talking about thousands of dollars. That being said, it's more crucial than ever for an agency to illustrate the value of what we bring to the table from the very first interaction with that individual, all the way through to product completion and support - avoiding the loss of that client to the lowest bidder (or the cheapest jar on the shelf).
It's important to remember that when price trumps value in a buying decision, there's often far less value present than we are led to think. Let's go back to our peanut butter conversation from earlier. Most jars of peanut butter are around the same price and come in about the same size jar, or do they?
Pay Attention To The Tricks
Have you ever looked at the bottom of your favorite jar of peanut butter? Have you ever noticed the "dimple" underneath? This isn't there to ensure freshness, or enhance your ability to hold it, it's to cut costs. Yup, by placing a dimple in the bottom of the jar, peanut butter manufacturers save thousands of dollars a month by getting you to pay the same amount for less product - all in a way that you don't even know to miss. This allows companies to charge "less" (for a seemingly comparable product) while intentionally delivering less value to the customer. Sneaky little buggers aren't they?
My point here again with the peanut butter analogy is that although the price may be lower for a seemingly comparable product - it's very important to look under the jar and see how big the dimple really is. You might take less trips to the grocery store if you do.