Price discounting: Leading with price is the path to ruin

Dan Hill

Sensory Logic

The recession has increased the prevalence of price discounting. It's a perilous strategy that will kill your advertising, branded offers and, ultimately, your company

Nowhere in marketing do emotions run hotter during today’s slowly fading Great Recession than when it comes to the role of (low) prices being highlighted in advertising. In boardroom after boardroom, one can easily imagine what’s being said: ‘We’ve got our fixed costs, for salaries, equipment, etcetera, and we need to make some money fast. So let’s lower our prices, and let everybody know as loudly and clearly as can be." As a result, CEOs and CFOs carry the day, and chief marketing officers beat a quick retreat to their offices to let the ad agencies know what they need to do.

Only it’s a bad – even terrible – idea to lead with price in advertising, and here are seven reasons why.