Savvy consumers see through pricing strategies

I always look to see how many people comment on this column online, and how many times it is retweeted. As an anonymous columnist, it is the only feedback I get.

However, the one story that received the lowest level of engagement for some time was my piece a few weeks ago on pricing strategy. That disappointed me because I think ‘Price’ is perhaps the most important ‘P’ in the marketing mix.

Last week I wrote about how brands and consumers have changed post-recession, and one thing I think has changed is how we all react to pricing.

Consumers today are more savvy than ever. As such, I think that they understand the principles of what makes up the price. They get the “cost plus” argument – that brands/retailers need to make a margin – and also understand that price can be used to drive behaviour. I remember working on a brand that changed customers’ payment behaviour with a discount for payment by Direct Debit. Today, you regularly see retailers adding a surcharge for payment by credit card. Both effectively communicate to the customer that paying in a certain way is more/less costly to the company, and the company has to pass that on.

In the same way, customers recognise that a big chunk of cost is in packaging, so expect to pay slightly more for a smaller pack size of the same product. They also get the fact that better quality ingredients cost more, so a “Finest” range should cost more than its “Essentials” equivalent.

But where customers get annoyed, is when there is no apparent cost advantage in a pricing decision. Why do customers get penalised for boarding a later train than their advance ticket was booked for? The train company is still running that train, still got their money upfront, and still has the same number of carriages and seats. Does a bank customer who goes moderately overdrawn cost more to manage than someone who remains in credit but makes ten times as many transactions in a month?

As marketers, we need to think through the consequence of our pricing decisions, and stand in the feet of our customers if we want them to trust us…

More from the Secret Marketer

Latest from Marketing Week


Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now


Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.


From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.


Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3703 or email

If you are looking for our Jobs site, please click here