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Aug 04

Value-focused Versus Price-focused Customers

Posted by: Steve Marr

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Most of us understand some customers make decisions by price alone; others purchase based on perceived value. Marketing to each type of customers is very different.

When I was in the international trade business, a fast food chain bought large amounts of hamburger meat from Australia and shipped it in frozen food containers. The customer generally requested competitive bids over three months. They made it clear that they would accept the lowest price. For several years we bid for the business and a couple times we landed the work for a quarter or two. However, when somebody was a dollar less; the business quickly went to the lower bid. Customer service seemed to make little difference. A sharp pencil was the only way to make successful bid.


When marketing to those who consider price alone, we are wise not to spend much time marketing benefits and service levels. These clients are looking for the cheapest way to provide their customers with “the lowest price that we feel we can offer.” For our frozen hamburger meat customer, spending a lot of time explaining why we were better than other competitors was a waste of time. This customer, and others, focused only on price. We didn’t spend a lot of time on a bid process. We simply quoted the best price possible. It was okay whether we got the work or didn’t.

In the international trade business our company focus was not to be the lowest cost supplier in the marketplace. Instead, we aimed to offer the strongest value and superior service at a reasonable price. If we cut our pricing too low, we would lose money. We learned that we should let those interested in the lowest price select one of our competitors.

Other customers appreciate value and service. They might pay more for the service or quality they want.  To those customers, we would market the benefits and the enhancements our company offered. 

When marketing to customers by highlighting value and not lowest cost, focus on the key benefits to your customers, benefits you believe a customer is willing to pay.

Keep in mind that customers who seek value will be interested in a product and services that offers the best benefit, quality, usability, product support and overall efficiency. Focus on the key benefits when the customer seeks value rather than price. Make sure your business model leads with value over lowest possible price.

In Scripture we see an example of an ultimate value proposition in the parable of the precious pearl, a symbol for salvation. “Again, the kingdom of heaven is like a merchant in search of fine pearls.  When he found one very precious pearl, he went away and sold all he had and bought it.” (Matthew 13:45-46) Provide the information that your customers want, whether they are value-focused or price-focused.

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