“It’s all about price, the lower the price the more units I shift”. This is a common statement I hear and it is actually quite an accurate statement that many companies I work with make. The one variable many manufacturers and service-based companies can easily adjust to create demand is the price.
The problem with tweaking the variable of price (besides lowering margin) is what happens when the competition does the same? The problem with relying solely on price as the driver for demand for a product or service is that once the sale price matches that of the cost of production, the only variables left to change affects quality.
Online, the drive to a lower price happens much quicker than in the off-line world as it is so easy to compare like-with-like. Goods for which there is demand, but which is supplied without qualitative differentiation across a market, such as corn, milk or copper, all have a universal price derived by forces external to the producer. Commoditisation occurs as a goods or services market loses differentiation across its’ supply base.
When considering lowering price perhaps it may be wiser to try and create differentiation. A little thought in to how to move your offering from being a price sensitive commodity like corn and creating a unique story or proposition will transform the fortunes of an online marketing campaign. Our evidence based research into our customers’ online marketing campaigns backs this up. Those that lead with a unique story make more money than those that lead with price.
Corn is a commodity. A unicorn is a wonderful and unique story that has intrigue and interest. If your business had a unicorn product or service, people would talk about it and your price could reflect the difference from the competitors that just sold corn. Corn or Unicorn, they are both still “corn” but our perceptions of the value of each are very different.
Marketing Challange: Creating A Differentiator
