You spend all of this time, money, research, careful sourcing and attention to detail to create and manufacture the best natural product. It’s far and away the best of its kind. No supplement is more efficacious than yours. No superfruit is higher in antioxidants. When it comes to raw juices, yours not only tastes the best, but it also has more digestible enzymes and whole nutrients than any other drink out there. So why is everyone complaining about the price. It’s just not fair, right?
In our just published SPINS/Pure Branding Natural Products Marketing Benchmark Report 2015, the number one external marketing challenge identified by 301 of your marketing peers is justifying the premium price. Half of the respondents from the survey perceived price sensitivity to be their main marketing challenge.
And guess what — it’s not the fault of the natural shopper.
The Underlying Cause of Price Sensitivity
The challenge in justifying a high price lies less with the consumer — and more with a company’s marketing and differentiation. As the report found, the underlying cause for price sensitivity is tied to the #2, #3 and #4 challenges — a low awareness of the negatives associated with conventional products, the confusion in the market between organic and natural, and confusion around the value proposition. You could argue that a company can’t control perception about the value of conventional products or the confusion between organic and natural, but in truth, if you can’t clarify the value of organic over natural, if you can’t show the value of your natural product over the similar conventional product, your marketing is not succeeding.
For those 22% who are having trouble clarifying their value proposition, that is a problem that you’ll need to overcome not tomorrow, but today. Otherwise you risk seeing their product turn into a commodity with little differentiation from the competition.
And all of this confusion leads down on path — the path to lowering your price, offering more discounts, and watching your profit margins erode. Not pretty.
Creating a strong brand with a clear and differentiated positioning and communication platform is one of the ways that will help you make your participants willingly spend more on your products, because they think they are worth it.