The ‘Less Expensive’ Value Proposition
Companies often build entire product lines and brands around the ‘less expensive’ value proposition. Want to be cheaper, and do it correctly? There’s more than meets the eye. This article is the first in a series about the features and benefits that companies, and their marketing teams, can hang their hats on when it comes to selling for less.
- Amongst the most common value propositions marketers use
- Selling for less exists in every industry/product niche
- It makes products accessible to customers from all backgrounds
- Selling for less usually means tighter margins, and/or less features
- Customers incorrectly assume less money equals lower quality
- Optimize products by focusing on most critical features and benefits
- Thrill customers by delivering a comparable product at a better price
- Reinforce quality of less expensive products by using high quality ad creative
- Tell the story of why you’re less expensive
- Reinforce that lower price doesn’t mean lower quality using reviews and social proof
Marketing ‘Less Expensive’: The Basics
Value props are nothing new, they’re so entrenched in marketing that it’s safe to assume that consumers are more aware of them than ever. Does this make them less effective? This post is the start of a series that will help identify the most common value propositions marketers use to entice people to buy, with guidance on how to maximize them in 2022.
Marketers lean on this one all too commonly: developing a product that’s less money than the competition. Need some examples of this? Head right to your grocery, or drug store. It’s hard to think of a grocery chain that doesn’t have their own line of knock-off products that are substantially cheaper than the brand name ones. Think: No Name, Amazon Basics, etc. If it didn’t work, they wouldn’t do it. This type of value proposition exists everywhere, in virtually every niche. For every premium mobile device, there’s tiers of less expensive options to fit all budgets.
What to Know About Being ‘Cheaper’
When you trade on the ‘less expensive’ value proposition, you’re generally diminishing your profit margin, and/or giving up features and quality.
That’s OK for a number of reasons. One, there’s always a market for something being less expensive. Two, there’s a strong chance you can release something that’s hyper-focused on only the product’s most important features and benefits. This means your product or service can be less, because it has less bloat, and is less costly to produce/provide than the brand name version. Overall product quality isn’t impacted, and customers are thrilled with your disruption to the marketplace.
This is one reason it’s so key to know who your customers are, and what really matters to them from a features and benefits point of view.
One of the biggest challenges in leveraging the ‘less expensive’ value proposition is that there can be an inherent assumption of the thing being lower quality. This is especially true in consumer packaged goods, where your products are side by side, and branding is everything.
Be Cheaper, Without Looking Cheap
Just being your product sells for less doesn’t mean it’s worse, and you need to make sure your audience doesn’t think it is. How? Invest in quality of your creative. There is data suggesting that next to brand size, quality of creative is one of the most important things when it comes to advertising profitability. Just because you’re producing a lower cost version of something doesn’t mean it has to look cheap (unless you’re using simplified packaging to stand out as the “cheaper and close enough” option – which is a common tactic for grocery store “in-house” brands).
Another idea you can leverage: lean into the fact that you’re less expensive, and market on the fact, but tell the story of why. For example, it might be because the current market doesn’t permit everyone having equal access to a particular product or service. Ross Dress for Less is a great example of a brand banking on high-quality, and low prices.
Ultimately, your content strategy is how you’ll win. Leverage:
- Landing pages
- Blog posts
- Social media
These are great go-to content channels to shout your story loud and clear. Use “social proof” and feedback from your customers that help reinforce that paying less doesn’t mean getting less.