The first thing we associate “great value” with is almost always “low price.” And while one often accompanies the other, it’s also true that price cannot always be a reliable measurement of value.
We’ve been conditioned to associate value with pricing for so long that we forget one important thing: while the seller sets pricing, it is the consumer who determines value. In other words, we are ALL value shoppers—we just seek value in our brands for different reasons at different price points.
For example, if an individual buys a $100,000 Land Rover that enables them to traverse all kinds of terrain in any weather, draw admiring glances everywhere, and transport a family of five in supreme comfort and safety, it’s clear that they are receiving “great value.” But “great value” is also received by someone who buys a $5,000 used Hyundai that gets them to and from their job every day, gets great gas mileage, and is trouble-free year after year. There’s dramatically different pricing, but both yield meaningful value and satisfaction.
Smart brands understand the difference between value and price, and thus free themselves from the trap of having to incorporate “affordability” into their communications. We’re increasingly seeing that today’s consumers are willing to pay for convenience, quality, and service more than ever. Besides, no matter how loudly you shout that your prices are low, a quick online search can reveal what your competitors are charging and whether or not your claims are true.
Apple and Starbucks are among today’s most successful brands because they provide value that has nothing to do with pricing. Both offer products that are undeniably expensive for their categories, but give customers a premium experience and—just as importantly—an expansive community and ecosystem that few if any of their competitors can match.
On the other hand, strong brands can have affordability as a component of their foundation as long as they offer strong value in other facets of their brand experience. UNIQLO and IKEA feature attractive prices, but their unique retail environments and stylish products make customers feel like they are getting designer apparel and home fashions.
It’s way past time for marketers to understand and separate the dynamics of value and price. The savvy ones will build their brands and customer loyalty; the others will continue to fight price wars that never end.