The Truth About Price: What YourCustomers Really Think

By Lisbeth Calandrino, Author of Red Hot Customer Service: 35 Sizzling Ways to Heat Up
Your Business and Ignite Your Sales

For years, we’ve fooled ourselves about price. Salespeople were told that if they were good enough, they could convince customers to pay more — because “price isn’t really an issue.”

But let’s face it — price is a huge issue.

Today’s customers have done their homework. They think they know what things should cost, and in many industries, products have become commodities — interchangeable and price-driven. When that happens, both price and value decline. To stay in business, you must compete on quality, service, and price — but you can’t lead in all three. Of those, price is the least effective long-term strategy.

When a Product Becomes a Commodity

A product becomes a commodity when it’s easily available and looks just like everything else. Think of white rice — it all looks the same. Customers believe they’ve seen it before, probably at a lower price, and brand loyalty evaporates. Once your product looks identical to the next, the battle shifts entirely to price.

How Retail Has Changed in 50 Years

Let’s look at how pricing and perception have evolved:

• 1960s “Made in America” was a selling point. Imports from China or Japan were considered cheap and unreliable.
• 1970s Consumer protection was minimal. No receipt? No refund. The store held all the power.
• 1980s Superior products stood out. Stainmaster carpet, for example, became a game changer.
• 1990s Global quality balanced out. Japanese and Chinese products became the new standard.
• 2000s The internet changed everything — consumers gained access to all products, prices, and reviews instantly.
• Now, perception drives value. A $399 computer isn’t exciting — but mark it down from a “list price” of $1200, and you’ve got a stampede. Shoppers crave the illusion of savings, even when the deal isn’t real.

Six Things Your Customer Believes About Pricing

1. Retailers must be truthful about pricing.
   Many customers believe list prices are regulated — they aren’t. In many industries,
   including flooring, prices haven’t increased much in decades, but quality has improved
   dramatically.
2. Their price knowledge is arbitrary.
   Customers get their pricing “facts” from online searches and social media, not from
   experience or data.
3. They don’t want to pay full price for anything.
   They expect discounts — so show them value through visible savings or smart
   promotions.
4. They misunderstand profit margins.
   Many assume your costs are minimal and your profits enormous.
5. They see low prices as personal victories.
   Especially women, who often compare prices, share deals, and take pride in finding
   “wins.”
6. They don’t always trust big-box “low-price” promises.
   Even Wal-Mart changed its slogan from “Always Low Prices” to “Save Money. Live
   Better.” — focusing on value, not just cost.

Ten Ways to Outsell Price Competitors

1. Know your industry.
   Stay aware of competitors’ offers and hidden costs. Social proof — reviews and friend
   recommendations — now outweigh brand loyalty.
2. Speak the language of value.
   Use words like professional grade, certified by, or approved by. These elevate perception.
3. Build relationships, not transactions.
   Asking about customer needs creates loyalty that pricing alone never will.
4. Out-talk your competitors.
   Sell longevity and value. Ask, “How long do you expect this to last?” and connect the
   answer to product quality.
5. Sell exclusivity.
   People want what others can’t have. Offer limited editions, customization, or bundled
   services.
6. Explain why you cost more.
   Like Cosmo in Moonstruck said: “Copper pipes cost more, but they last.” Customers
   respect transparency.
7. Show products creatively.
   Use good, better, best, and over-the-top categories — people love to buy “the best.”
8. Know the math.
   Simplify costs and frame purchases as investments that increase value or save money
   over time.
9. Set yourself apart with service.
   Offer custom installation, final walkthroughs, certifications, and follow-up calls. Great
   service sells itself.
10. Give discounts wisely.
    Make them time-sensitive and specific. “$200 off this weekend” feels real. Or better yet,
    offer a gift with purchase — just like the cosmetic counters at Macy’s.

The Bottom Line

Customers will always believe things should be cheaper. Your job is to make your product feel more valuable.
Understand what your customer believes. Know what your competitors don’t.
And most importantly, change the game by outvaluing, not by giving things away.