The price of petrol, the price of property, the price of health care; price is in the media and in our mind. This may seem like a relatively recent phenomenon, born out of economic necessity, but as far back as the 19th Century we were equally fixated on price. In fact, the famous playwright Oscar Wilde once said, “These days man knows the price of everything, but the value of nothing.”
In marketing, price is also a frequent topic of focus. Over the years I’ve seen countless studies showing that customers are primarily motivated by price. From milk, to mainframes and mobile phones, when it comes to customer motivations, the price, apparently, must be right.
But what if price isn’t always right? Price may be what customers are saying in focus groups, and ticking in survey boxes, but what if something else is going on below the surface? Through a number of studies we’ve found that price is often a proxy for deeper motivations; here are two examples where the price isn’t right.
The price of control:
Consumer Translation: I’m sick of being kicked-around by these guys; I’m going to shop around for the best price possible and make them work for the sale.
The price of uncertainty:
Focusing on price can also occur when customers feel overwhelmed or uncertain in a category. This is a common occurrence in categories that require customers to process large amounts of information, or overwhelm them with technical jargon. In these instances, with an inability to work out which product matches their needs, many customers will use price as a form of shopping support.
Consumer Translation: I’ve got no idea which wireless router matches my needs; I’ll just go with the cheapest one and save myself the prospect of buyer’s remorse.
In both of these examples, customers appeared to be using price as a primary purchase motivation. However, in both instances, price was being used as a proxy for a deeper motivation, namely control or uncertainty. By providing the customer with an alternative way to feel in control, or by helping alleviate uncertainty in the category, an opportunity existed to address customer needs without compromising on price.