How should I communicate the price of my brand to consumers?
Find out how to lessen consumers’ pain of paying by putting your brand’s price in context
Do you feel physical pain when you spend your money? Do you experience negative emotions when you buy something? You are not alone. Behavioural scientists have proven that pain centres in our brain activate in financial transactions, which explains why humans hurt in such occasions. It’s called the ‘pain of paying’, and it’s a pain so real that most of us would rather not lose £5 than find £10… loosely restating Kahneman’s and Tversky’s earlier findings about the pain of loss being twice as intense as the joy of gain.
Counter-intuitively, the solution for brands is not a lower price. We tested this and no matter how much we lowered price in our experiments, our results concluded that the price itself never brought a brand into consideration. Not if consumers didn’t consider buying the respective brand in the first place. So, if a lower price is not the answer, what is?
It all comes down to how a brand communicates, frames and contextualises its price. The data at my disposal steered my thinking towards three pots: value, price-framing ideas and clever advertising. And the data suggests if we do this well, we might just lessen consumers’ ‘pain of paying’. Have I captured your interest?