Leading with Price Will Kill Your Advertising,

Branded Offers, and Ultimately Your Company

by Dan Hill

president

Sensory Logic

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.

SoCEOs 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.