This Classic Marketing Lesson Is Flawed

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The first piece of advice a mentor gave me eight years ago changed my view of marketing forever. He explained why price does not matter in a transaction.

“Nobody buys on price,” he said.

It’s a favorite mantra propagated by sales and marketing gurus everywhere. I later learned that my mentor’s advice was partially right. I came to that realization after two experiences several months apart.

The first experience occurred seven years ago at a 7–11 of all places. I had frequented this store each day around 2 PM for an afternoon snack. I kept this routine up for over a year. Then I found I can buy my snack in bulk and save about 30% off the price 7–11 charged.

I had run out of my stash, so I made my way back to the 7–11. The owner was a friendly man; he always said hello and chatted with his customers. When I walked in after my self-imposed exile, he said six words which imprinted a critical lesson in my sales and marketing life.

“Hi, haven’t seen you in a while.”

His tone was friendly, not accusatory. I doubt he kept a chart of my visits. But I panicked. I had been cheating on him and he caught me. I felt like I was a child caught with his hand in a cookie jar. I did the only thing I could do. I lied.

“Yeah, I was on vacation and then had to travel for work.”

Two lies in one sentence. I have no idea if he believed me. I was consumed with guilt because I had shunned this nice man’s local business to save fifty cents on my daily energy bar.

From that day forward, I resumed my late afternoon shopping at the local 7–11. Sure, I spent an extra $2.50 a week, but it was worth it. What was the lesson in all of this?

A One-Two Punch In The Gut

Later that night, I thought about the chain of events. I had decided to forego a cost saving out of guilt. The store owner was also a man I liked and respected. It was like a one-two punch in the gut.

I consciously decided to spend more money on an identical product. Interestingly enough, I had just begun to learn the craft of Copywriting. My mentor at the time had recently drilled the nobody buys on price lesson. This experience was a textbook example of that rule in action. I later learned that was only half true.

My Mentor’s Error

A few months later, my wife asked me to stop at the supermarket on the way home. She needed a small can of tomato paste. There were four or five brands in the supermarket. I chose the one with the lowest price. In this shopping experience, price did matter. Why? Because all tomato paste is the same. The only difference is the label wrapped around the can.

After this experience, I realized the error of my mentor. Here is the real story on price as it relates to sales and marketing.

Price matters ONLY when nothing else matters.

If you fail to distinguish yourself in any meaningful way, your customer will default to price as the final criteria. The store owner in my earlier examples was super friendly. He’d always ask if there was anything I needed that he didn’t carry. That’s why I did business with him even though he was more expensive.

There is a multitude of methods in which you can differentiate yourself. Some of those methods will appeal to some customers, but none will appeal to everyone. You need to pick a few and run with them.

Almost every product becomes commoditized at some point. For most of us, offering a unique product is a tough challenge to sustain long-term. But there are other ways you can create uniqueness.


If you call your cable company, you’ll suffer through a multitude of automated operators before you get to speak with a human being. They want you to give up. The fewer customer agents they need, the less money they spend. Of course, most of us only have one, maybe two choices for our cable provider. They can afford to give us lousy service.

I’m guessing you do not have that luxury, and you probably work hard to deliver quality service.

Guess what. Quality service isn’t good enough. Too many businesses and professionals provide decent service. A scant few give “wow” service.

Last year I bought my wife an essential oil diffuser. It was a top of the line model. She told me I paid double what it should have cost. A few months later, my son knocked over the ceramic cover. It broke into several pieces. We went back to the store and asked if we can buy the cover separately. The woman told us we couldn’t, but she would give us another one at no charge. We were part of their “family.” Accidents happen and there was no need to penalize us. Now that’s service. We also bought a few bottles of essential oil. How could we not reciprocate by spending some money?


Imagine you’re in the market to remodel your bathroom in your high rise apartment. You have three choices in contractors. They all have excellent references. The first contractor does everything: roofs, kitchens, bathrooms, walkways and patios. He’s remodeled a dozen bathrooms in the past year, two in high rise apartment buildings. The second contractor does kitchens and bathrooms. She’s remodeled thirty bathrooms in the past year, six in high rise apartment buildings. The third contractor only does bathrooms in high rise apartment buildings. He’s renovated fifty in high rise apartment buildings the past year.

Who would you want to redo your bathroom? That’s right — the company whose expertise matches what you need. At first glance, it would appear that the third company gives up a lot of business by focusing on such a narrow slice of the construction business.

The truth is, they’re winning that tiny slice of the market and beating out most competitors who try and do everything. The contractors who do everything don’t win nearly as much because they’re not renowned for any specialty.

Focusing on a narrow piece of your market makes it easier for you to compete against larger competitors. It makes it easier for you to win business in that narrow slice you’ve carved out for yourself. See this example for freelance Copywriter.

“I help female cosmetic dentists who cater to women over fifty win more customers.”

Compare that to a more generic pitch.

“I help dentists get more customers.”

Or this super-generic pitch.

“I help businesses win more customers.’


We all want to feel like we’re part of the cool-kids table in some area of our life. Are you a well-respected gamer, comic book collector, yacht connoisseur or widget enthusiast? What if a business selected you as their customer? What if you could use that as a signal to others who share your passion?

There are two ways you can create this exclusivity.

I know I said price only matters when nothing else matters. In this case, I refer to pricing as a signaling tool. By charging more than everyone else, you set a barrier that prevents some customers from doing business with you.

You can also create other hurdles for your customers before they do business with you.

“We only do business with widget enthusiasts who have experienced…”

An application process, lack of a website and complicated procedures are some other ways you can create a barrier to entry. The ones who manage to pass the test feel a sense of pride and group belonging for having overcome the obstacles. This method does not work for everyone, but in the right situation, it works.


Imagine a restaurant that gives you a bottle of wine just for sitting down at the table (they bake the price into the food items). What about a marketing agency that offers a complimentary service as part of their deliverable? How about a bank that doubles as a social club? I don’t know about that one but banks need some re-imagining, don’t you think?

By adding or tweaking a standard service or product, you make it more interesting to a specific group of people. This kind of approach requires testing and measurement to determine if it’s working.

Like the exclusivity angle, it may not work for all businesses, but it can work well for commoditized products and services.

Experimenter in life, productivity, and creativity. Work in Forge | Elemental | Business Insider | GMP | Contact: barry@barry-davret dot com.

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