In this article, you'll learn why...
- Discounting isn't sustainable
- A low-price strategy kills customer loyalty
- A brand on sale undermines trust
The following article is drawn from Dan Hill's new book, About Face: The Secrets of Emotionally Effective Advertising (October 2010, Kogan Page).
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 beat a quick retreat to inform their ad agencies.
But the thing is... 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, and their mouths fall 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 repeatedly.
Second, surprise is really a pre-emotion. It's brief (less than a second long) and it's followed by a verdict: either a positive "Wow!" or a negative "Yikes!" Repetitive 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 and generating allure that exceeds feelings of disgust about surrendering cash are what make a positive purchasing experience.