Value Pricing and Stale Marketing

Pool noodles. You know those coloured foam round sticks that children play with in swimming pools? Two summers ago, I saw a gas station selling them in a rural area displaying a sign proclaiming their price. The sign said “Cheaper than Canadian Tire in Town”. Why, I thought would you advertise like that when you could have posted a sign reading instead “Only $1 more than Canadian Tire, 20 miles away”. They were simply giving up bottom line dollars.

If that got you thinking then you might consider Gillette. I worked in London across the street from the Gillette factory at a time when the pundits said that Gillette had lost its way and would disappear.  Gillette made and sold razor blades, almost a commodity item, competing for a large market with even larger companies. And then BIC entered the market with cheap disposable razors and the black clouds gathered. But instead of folding, Gillette created a disposable razor  giving a smooth shave just like the  old style blades  secured by a metal top and screw in handle. The multi bladed Trak razors sold for higher prices and sold well.

Finding the profit is always about finding the value proposition. For the pool noodles, it could have been clearly stated in that first sign. “Don’t drive 20 miles for a $1 saving.” In the Gillette case, they found a value proposition in appealing to those who liked the notion of a disposable razor but would pay for a shave without the tugging and face rash given by BIC razors.

Do you think you have a product or service where you are stuck in a price trap being squeezed by competitors and customers?

Customers come in two flavours. First, as above, there are the customers who will drive across town to save a dollar because they need that dollar. For the rest however, they will trade dollars for quality or perceived value. The challenge in your business, whether it is a retailer, contractor or service provider is to find value that your customer will pay for.


  1. Grab all the advertising you and your competitors use and build a table of benefits for the customer. Cross out all duplicates. What is left?
  2. Interrogate (yes, the right word!) your front line people. They could be the sales people, installers, after service providers or even reception. What do they know about what the customer wants and you don’t offer?
  3. Ask your customers. Why did you buy from us? . how can we improve? Collect that data and ruthlessly examine it. Treat it as data not anecdotes, and look for the patterns.
  4. Create a Unique Selling Proposition – a clearly articulated statement about who you are and what you do that shouts the answer to the questions, “why should I buy from you?” and “what’s in it for me?” Add it to every piece of advertising or marketing material. It costs you nothing extra yet this will have an incredibly profound impact on your bottom line.

Now, be honest with yourself once a month and ask yourself, “If I raised prices by 50% how many customers would leave?”  If the answer is all of them, then go back to

Andrew Gregson

Andrew Gregson

Senior Partner at Intent Financials Inc.
Andrew D. Gregson is a licensed financial professional who holds 2 Masters degrees. Mr. Gregson is a former owner of multiple businesses, writer on business matters, published author “Pricing Strategies for Small Business”, former owner of 2 franchises and 5 start-ups and has worked as a Chicago based business consultant.
Andrew Gregson
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