5 Positioning Ideas When Leading With Price
What works best? Selling product benefits, then revealing the price? Or revealing the price, followed by selling benefits? There are rarely absolute answers, and statistically valid A/B testing in a direct marketing environment will give you the answer that works for your situation. Still, findings of a new study suggest five ways for direct marketers to reveal price.
Neuroscientists and professors from Harvard Business School and Stanford University conducted a study to see if considering price first changed the way the brain coded the value of the product.
The focus on the research was on brain activity when the participant saw the price and product presented together. They were most interested in the area in the brain that deals with estimating decision value (the medial prefrontal cortex), and the area of the brain that's been called the pleasure center and whose activity is correlated with whether a product is viscerally desirable. This pleasure center is called the nucleus accumbens.
Fundamentally, the research indicates there are differences in how a person codes information, based on whether the product has a greater emotional attachment, or whether the product was more practical.
They found that brain activity did vary in the sequence of product versus price first. A conclusion of the report is that when the product came first, the decision question seemed to be one of "Do I like it?" and when the price came first, the question seemed to be "Is it worth it?" Three other points made in the research suggest that showing price first can make a difference:
- The order of price or product presentation doesn't matter when the product is desirable and easily understood and consumed (e.g., movies, clothes, electronics), and fulfill an emotional need. If the product is affordable in this instance, then it's an easy decision no matter how price was presented.
- When a product is on sale or bargain-priced, showing price first can positively influence the sale.
- When the product is practical or useful (more than emotional) showing price first prompted participants to be significantly more likely to purchase a product.
"The question isn't whether the price makes a product seem better, it's whether a product is worth its price." said Uma R. Karmarkar, one of the research author. "Putting the price first just tightens the link between the benefit you get from the price and the benefit you get from the product itself."
Reinventing Direct is for the direct marketer seeking guidance in the evolving world of online marketing. Gary Hennerberg is a mind code marketing strategist, based on the template from his new book, "Crack the Customer Mind Code." He is recognized as a leading direct marketing consultant and copywriter. He weaves in how to identify a unique selling proposition to position, or reposition, products and services using online and offline marketing approaches, and copywriting sales techniques. He is sought-after for his integration of direct mail, catalogs, email marketing, websites, content marketing, search marketing, retargeting and more. His identification of USPs and copywriting for clients has resulted in sales increases of 15 percent, 35 percent, and even as high as 60 percent. Today he integrates both online and offline media strategies, and proven copywriting techniques, to get clients results. Email him or follow Gary on LinkedIn. Co-authoring this blog is Perry Alexander of ACM Initiatives. Follow Perry on LinkedIn.