The Dangers of Comparative Pricing

Find out a bit more about comparative pricing and why you should quite possibly avoid it if you are using it to sell your goods or services.

What is comparative pricing?

Comparative pricing is a marketing technique where you directly compare your price with a competitor’s pricing, be that one competitor or many other providers.

You’ve probably seen it all over the place. In fact comparison websites are on the rise as people are trying to find the best possible deal.

When the consumer goes to a comparison website it is led by their own choices and actions. Where there seems to be a danger is when a company tries to make a direct comparison as part of the selling process.

A study conducted by Itamar Simonson at Stanford University found that, “it [comparative marketing] can change the behavior of consumers in very fundamental ways.”

In the study the sheer fact that people were being asked to make a comparison seemed to cause people to feel they were being tricked or manipulated in some way.

These feelings of fear then proceeded to manifest in the consumer not making a buying decision at all in order to minimise any feelings of risk that they felt.

Of course, this trend to not make a buying decision is not a great one when you are trying to sell a product or a service. If you are using comparative pricing as part of your marketing drive you may wish to reconsider it and think about the potential customers who are not buying anything because of it.

What to do instead of using comparative pricing?

Ok, so perhaps you were using comparative pricing as one of your selling cornerstones, and now you are going to be removing it.

That’s going to unsteady your business, right?

Well, according to the research, if you remove the comparative pricing you are more likely to get more business, not less, which has to be better.

The question is, “what to fill this comparative pricing void with?”

Instead of comparing your product, highlight its unique strengths and place the emphasis on the benefits to the customer. It doesn’t matter how much cheaper you are than ABC company, as long as you can fulfil the needs of the customer the cheaper price is simply an added bonus.