1) It is not a sustainable long-term strategy. "One of the key advantages of a sale is the element of surprise," the writer says. And the stopping power of a low price will fade quickly when repeated surprises lose their power to surprise.
2) It reminds people that they're paying money they don't want to pay. Research has shown that any price tag produces disgust in a buyer's mind. A discounted price doesn't cause positive feelings - it simply lessens the degree of disgust.
3) It shifts a customer's mind from right-brain emotion to left-brain analysis. "That's a bad tradeoff, given that everyone feels before they think," he notes. Especially when you consider an IPA study that found "emotion-oriented campaigns generate twice as much profitability as traditional, hard-sell, reasoning-oriented campaigns."
4) It undermines brand loyalty. Long-term customers will wonder why anyone walking in off the street gets the same deal they do. But that's not the only problem. "Current customers pay less for goods they were already buying (and may not buy again at full price)," he argues. "As for new customers who bought because of a deal, their loyalty is less real than the profit margin sacrificed."
5) It causes buyers to question what your company stands for. "With price-leading advertising, a company's identity becomes fuzzy," he says. "Suddenly, you are either a discount brand or you're signaling a lack of confidence that, in dating as in commerce, is not attractive."
The Po!nt: "Leading with price suggests you have nothing else to say or show in advertising," says Hill. "Price as your main attribute doesn't mean anything."
Source: Dan Hill, MarketingProfs
