How Price Impacts Small Business Marketing Strategy

I was surfing Facebook recently and came across an interesting post that said, “If you want to get rid of price shoppers, put pricing on your website”. This, of course, started a big discussion about the role of price in advertising and sales. I’m not sure what it’s like in other industries, but in mine (carpet cleaning), this is a touchy topic. Most, it seems, hold their pricing close to the vest. They want to be able to talk to the person so they can close the sale. But is this the right approach? Are times changing? What role should price play in your sales and marketing strategy?


I’m not one to bury the lead, so let’s dive right in. One of the comments on that Facebook post read, "my biggest reason for success is never advertising price", to which I responded, "There's a huge difference between advertising price and providing price". To explain, let’s talk a little bit about the psychology of buying.


Psychology of buying


What happens in a person’s brain when they decide to buy something? How do they go from “I’m happy keeping this money in my pocket” to “I’d like to trade this money for a product or service”? There are many studies on the topic, but the simple answer is emotion. Even for the most logical among us (I actually consider myself one of those), it all starts with emotion. “Yuck, my carpet is dirty and my kids are crawling on it.” Or, “I’m sick of looking at that bird poop on my office window". I'm serious, I looked up and that same bird poop has been there for 6 months.


That’s emotion. Something bothers me. Or, I see my neighbor’s new gadget and I want one too. Emotion. My mom is coming to visit and I want things to look good for her. Emotion. It all starts with emotion.


So, once the emotion triggers action, what happens next? A search for a solution, of course. This is where the path starts to diverge. How people find a solution is an individualized process. It's not only about where they look for that solution, but how they look. Some people shop for price and others shop for value (more on this in a minute). But it’s not quite that simple, I could be be a price shopper when looking for yard maintenance but a value shopper when looking for carpet cleaning. It all depends on what I care about. It also depends on what I see as a commodity versus what I see as a specialty. (But that’s a topic for another day.) For now, let's focus on the fact that some people are shopping for price and others are shopping for value for a particular product or service.


Price shoppers vs. value shopppers


To attract the price shoppers you need to advertise price. These shoppers see you as nothing more than a commodity, and they believe your competitor will do as good a job. Since they don't see a difference between your company and the next one, they want the cheapest price. These are the people who respond to the “4 rooms for $99” ads. You know what else is true about these shoppers? They are not loyal! You cannot build a solid “book of business” on these people. If these are the people you want to attract, advertise your price.


The value shoppers are a little trickier to figure out. If they aren’t going to immediately respond to price, what the heck are they looking for and what does this mean for us as business owners and marketers?


First, it means these shoppers are going to be using emotion to make their purchasing decisions. They want someone they can trust. And how do they determine that? They want to see your face. Reputation marketing, like reviews, guarantees and credentials are fantastic (don't get me wrong), but humans make initial judgements by looking at each other. For better or worse, we just do. If you do not put a face to your service business, you are behind in this competition.


Trust is an emotion. The value shoppers make an emotional decision to trust who they do business with. Now that they have made that decision they must justify it with facts. That’s right, facts come second for these people. And one of those facts is how much the service is going to cost (you thought I had forgotten all about price, didn’t you)?


Let’s face it, you’ve won this person’s trust at this point, but it’s fragile at best. You can break this newfound trust, fast. You know what one of the best ways to break that trust is? You guessed it. Start being dodgy about the price. Play games with them and it all comes crumbling down. You need to provide them with pricing information. Not advertise it. Do not lead with price. But, provide it when they’re ready for it. Do you see the difference?


Pricing as part of your marketing strategy


So, how does all this fit in the digital world? If I can get the customer on the phone, I can build trust, get a proper scope of the job, talk price. But is that what people expect today? The latest studies indicate that 88% of people do online research before they buy. Read that again. 88%!


We still let our fingers do the walking but it’s no longer dialling the phone, it’s typing at a keyboard. So here’s the important conclusion: Most buyers are using websites to answer the question “who can I trust”? And a big part of that is “are they up front with their prices?” You need to provide your prices. Online. If you don’t, you’re losing a lot of people. And it’s only going to get worse next year, and the year after that.


So, should price be part of your marketing strategy? You bet it should!

It should be available online and you should provide it in such a way that builds trust. To do that you need a website that converts and you need a tool to provide pricing at the right time, in the right way. Thinking that you should lead with your price - or on the opposite side, hide pricing – will drive away the exact customers you want.


About the author: Dale Witenhafer started Clearly Clean 10 years ago. Dale has an Accounting degree and an MBA - and still chooses to grind it out in the trenches.