The Emotional Power of Price
by: Grant Gooding
Read Time: 3 minutes
“Can you tell us if we are priced correctly?” I’ve been asked this a time or two.
There’s a prevailing notion that price is a cold, hard number that is objective and emotionless – a math calculation based on market variables. However, we’ve discovered that price can be a deep emotional trigger, and understanding its emotional resonance relative to other value propositions is critical for every brand.
“Price” is not just the price
One of the first things we help clients understand is that price can be communicated and measured in many ways. Like all other value propositions, price is relative. For instance, financing options such as flexible payment plans, bundling, delayed payments, or zero-interest financing can make prices more accessible and appealing. Similarly, highlighting the break-even point of a product, where customers can see how quickly their investment pays off through savings or additional revenue, shifts the focus from cost to value.
So when you are considering the price for your goods or services, remember that the number is only one part of the equation. Making a list of all the value propositions that impact the perception of price is a good way to quickly understand the many variables that play into your price.
Price as an Emotional Anchor
Imagine you’re a business owner, confident in your pricing strategy because you believe it’s competitive. But have you considered how your pricing message is emotionally received by your audience? Most business owners overlook this crucial aspect. They view price as a rational component of their offer, when in fact, it’s often the most emotionally charged.
When we measure emotional responses to pricing, we don’t just look at whether consumers think it’s a good deal. We delve into the underlying feelings—does this price make them feel smart, reassured, or valued? Or does it leave them feeling doubtful, anxious, or undervalued?
The easiest way to accurately assess how important price is to someone is to benchmark it against other value propositions. We took it a step further and developed an assessment method that gives one of the most accurate ways to measure price.
The Floating Commodity Horizon – The Measurement of Your Price
Our research process measures the emotional resonance of various value propositions on a relative scale. One of the key messages we test is what we call a “floating commodity horizon.” A floating commodity horizon is a message like “has the lowest price,” designed to gauge how emotionally resonant the price is compared to other value propositions.
The significance of this horizon is that it distinctly shows which value propositions hold more weight than price and which do not. Utilizing messages above the floating commodity horizon enhances the perceived value of the brand, while relying on messages below the horizon may devalue the brand, as they are less emotionally impactful than offering the lowest price.
Our Emotional Resonance Scale™ quantifies these feelings, allowing us to see how each message stacks up. More often than not, “has the lowest price” doesn’t evoke the strongest emotional response. Why? Because consumers aren’t just looking for the cheapest option; they’re looking for the best choice that aligns with their values and emotions.
Use Other Emotional Insights for Strategic Pricing
By understanding the emotional impact of your pricing messages, you can better align your strategy with what truly matters to your customers. This doesn’t mean abandoning competitive pricing but rather integrating it into a broader narrative that resonates on a deeper level.
For instance, if you can determine that terms, financing, break-even point, product longevity, delivery, or service messages yield greater emotional resonance than the price itself, you can potentially increase your price as long as that value proposition is communicated clearly.
Gathering this emotional data traditionally required extensive qualitative research—interviews, focus groups, you name it. But with our proprietary survey system, we’ve streamlined the process. Our method is quick, scalable, and delivers precise emotional scores for every value proposition you can dream up.
The result? A clear, quantifiable measure of how emotionally resonant each pricing message is. This allows for side-by-side comparisons and deeper insights into what truly drives your customers’ decisions.
The Emotional Equation of Price
In conclusion, pricing isn’t just a number; it’s a narrative woven with emotional threads. By measuring and understanding these emotional reactions, you can craft messages that resonate more deeply, driving not just sales but loyalty and trust.
So, next time you think about your pricing strategy, remember it’s not just about being competitive—it’s about being compelling.