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If you are not running a department store, why on earth are you still marketing on price?


One of the biggest mistakes many businesses make, especially SMEs, is to market their products or services on price. Trust me, the last thing you want to do is to position your products or services in a price war.

Yes, the big discount department stores and the likes of Crazy Clarks, can pull it off but for the rest of us, price discounting just won’t work. Why?

It is simply not sustainable. Ask yourself: can you offer a 25 or 50 per cent discount each and every week of the year? I bet your answer is, “No way!”

Does anyone really care about the price?

Take McDonald’s – are those hamburgers, fries and shakes the cheapest in town? Go to a local burger shop and you might pay a lot less for, arguably, better tasting food. However, McDonald’s have created an experience and fast service, therefore building its business on things other than price.

Do you know the exact price of a McDonald’s Happy Meal? I often tell my personal story of having six children under 12 years of age at one stage.

During this period, we probably spent millions on Happy Meals, but I couldn’t tell you the price of the product! Why? McDonald’s were clever enough to take our eyes off the price and onto the free Disney toy (which quickly pacified the six screaming kids on the back of the Tarago!).

Don’t play the price game, but rather play the value game.

In short, your clients want value. Many Australian and international research studies demonstrate very clearly that less than 15 per cent of people actually buy on price.

Look around for how many people are driving BMWs, Mercedes and other upmarket vehicles. Did they buy on price? Nope, they bought on perceived value and brand loyalty.

Is Disneyland the cheapest amusement park in the world? No way. You pay premium prices for everything there, right from the admission tickets, but do you get value from the moment you walk through the gates? You betcha!

If you run a hair salon, why not offer a free 10 minute head massage to every client? If you are a car mechanic, why not deliver a fully washed and vacuumed vehicle after every service? Such bonuses take their eyes off the price and onto the value.

What if the lawn mowing guy also cleaned the outside of your home’s windows each time he mowed your lawn? It would take him 20 minutes with a hose and squeegee but you would probably rave about it to your neighbours for weeks!

A living example of SME success through value addition

One of my clients, Wiggly Tail Butchery in NSW, has seen his sales skyrocket by 34 per cent in the last 6 months! He is offering fuel discounts; offering his customers 10 cents, 20 cents, 50 cents and up to $1 per litre petrol savings when they provide him with their loyalty.

For every $50 someone spends in any of his three butcheries, they receive 10 cents per litre fuel discount, up to 50 litres. When you do the maths, 50 litres times 10 cents equals $5. So in fact, he’s simply devoting 10 per cent of his sale price to a value-add bonus!

Had he advertised a 10 per cent discount, would he have enjoyed the same customer reaction? Of course not. But by adding value, he has created a customer attraction and loyalty system that is blitzing Woolworths and Coles! In fact, see for yourself how he did it.

In a career spanning over 30 years, John Dwyer has worked with more than 27,000 businesses across 58 different industries, with his marketing ideas generating over $15 billion dollars in revenue. His clients include KFC, Caltex, 7-Eleven, Westfield and he has worked with high profile celebrities like Jerry Seinfeld, for the Greater Building Society’s advertising campaign. Dwyer is currently travelling Australia speaking at seminars and conferences inspiring businesses. For more information about his marketing methods, please visit www.wowmarketingaccelerator.com.au or www.theinstituteofwow.com