If you want to kill your publishing company, lower your prices
People who work with me know just how much I get agitated when price reduction is mentioned as a key way to generate sales. I have grown weary of hearing this mentioned over the years. Low prices are the preserve of companies whose only advantage is volume. But most publishing companies are not in that game.
Companies who are not volume players should only use low price for tactical reasons. For example, to clear old stock, or to generate extra revenue at a low revenue period. But constant playing around with low price will – if done repeatedly – create the impression that you are a low price brand. And when people think of you as low price, you have lost your value argument. You have begun the process of brand collapse.
I was interested to read this article today by Dan Hill, author of the Kogan Page book Emotionomics, among other things. I met Dan once at a meeting at Kogan Page; he’s s a seriously interesting character whose book highlights among many other things how key facial behaviours can affect sales and trust. It’s only a small step to realise that just as we might not trust a sales person, we might not also trust a website, a brochure or a catalogue. Brand, therefore, is about consistency to engender emotional warmth and profitability. Pricing has a large part to play in that.
Here’s a resume of what Dan says about why low pricing can kill your brand:
- Consistently leading with price on your advertising reduces the “surprise” element of a good price deal. It ceases to be credible.
- Repeating low price as part of your offer creates the expectation of low price (e.g. TM Lewin shirts)
- Focusing on price compels your customers and prospects to forget to understand the value you offer that makes you special
- If price is a reflection of quality, low price implies low quality
- Low price cuts us off from “the wisdom of our emotions” – consumers could then regret their purchase because the end value is not what they thought they would get. The only benefit they received was a low price – and post purchase cognitive dissonance!
- Low prices damage loyalty of existing customers – they’ll see that books they ordered before are now offered for less. They lose trust in your integrity as a publisher. New customers buying on low price will almost certainly always be low price buyers – they will leave you at the drop of a hat.
- Brands are about consistency. Low prices create a ripple in your consistency and could even imply desperation. And no-one loves desperation.
So, if you’re thinking of a low price approach to grow your business and your brand, think again. Pricing is much more subtle than merely a function of commercial transactions. Brands are hard to build but can be relatively simple to destroy. Take pricing very seriously indeed before you start tinkering with your perception in the market place.