Oloye taught me something the other year.
‘People (all of us) don’t want the cheapest thing. They want whatever gives the most value.”
That one is right there is deep, very deep.
Thinking about it, even the poorest man does not want to be popular for going for the cheapest options. It is not a thing to pride in. When people pride in how cheaply they got something, it is not just the low price that thrills them, it is the great bargain relative to value.
Understanding this will make you less inclined to market with “lowest prices on the block”. Don’t misunderstand me, sometimes, saying you are low-priced might work or be may be necessary but it had better not be your most important marketing line except your target market is buying for price alone.
So, what is the most value?
Whatever gives the greatest satisfaction at the time and place of need for the right price.
Low price is not right price. If low price comes with post-maintenance issues, someone who wants ease will rather pay more to drive the issues away.
This is why there is a luxury market. It does not matter if a better-quality wallet is available at a lower price, she(anonymous) will not get it because there is a feeling that comes with carrying a Louis Vuitton. That feeling is something someone is willing to pay more for. That feeling is value.
It is difficult to apply this principle of value over price in markets where there’s no extra value to be offered, markets where innovation has reached its peak. Wait, is there such a thing as innovation reaching its peak? Maybe. Let’s leave that for another day.
You understand, right?
If innovation gets to the ceiling, there’s no further promise to make to customers and every market player who has attained that level of innovation are similarly priced except they begin to innovate unique market segments such as luxury services. Examples are Telcos and Commercial Banks. Their prices are similar.
Let’s return to where we started and conclude by saying, “the value conversation is more important than the price conversation”.