This one covers 90% of our job as brand strategists and designers. It comes up in every project we do, and it’s a critical inflection point for a lot of CPG brands. I’m gonna break it up into two parts because it deserves a little time.

Price sensitivity.

$15 for a tub of butter. $14 for 12oz of hot sauce. $30 for olive oil. We’re selling expensive shit. And rightly so.

These are primarily bootstrapped brands, starting from zero with a home recipe and a dream. The product HAS to be better than the name brand in your category. That’s going to mean more thoughtful hands-on processing, better ingredients, healthier alternatives. Not to mention wearing more hats than Jason Mraz (hate him so much).

There is no demand at first, certainly not enough to meet some of the very high price breaks afforded by big butter, big sauce and big oil. So comparatively, your shit looks expensive.

A lot of the time we find that this works pretty well DTC. Whether that’s in person at farmers markets, in store demos (not technically DTC, but you’ll see how this fits in later), or on your ecomm store.

Higher end, craft products need education and emotion to get over price sensitivity.

Why does it cost that much? What does that mean? What’s the actual benefit of that ingredient/process/insert your USP here? Who made it?

I’m not gonna dive into System 1 & 2 thinking again, you can read about that here, but essentially that’s what we need to achieve. Easily digestible information on the products benefits and how it might fit into my life as well as emotional buy in.

The best way to give me that?

In person.

If I can see you’re passionate about your thing, you explained it well, and it tastes great, game over. I don’t care if it’s $15 if I feel like I get to support a human who is doing something genuinely beneficial to me in some way.

The same can somewhat be said about your website. You have plenty of space to tell your story, show your founders, share the benefits of your product and build education that helps address customer concerns and convert. You own the customer journey and can build trust at every step.

Side note: that’s also the key to a high conversion ecomm store. Think about every question and concern a customer, retailer or distributor has had when interacting with your product in person. Look through your reviews and figure out what the most common misconceptions were that lead to 1 & 2 star reviews. Now address ALL of it on your PDP in the most concise, entertaining way possible.

Do you find people comparing to name brands? Cool, meet them there then. Show them what you can do that big butter/sauce/oil can’t.

Did people have hesitations on certain ingredients? Debunk it. MSG is no worse for you than garlic granules and it’s time they knew!

The less unanswered questions I have, the more likely I am to buy (within reason, this isn’t Wikipedia).

Ok tangent over.

SO. You’re selling well at demos, farmers markets and DTC. Price sensitivity isn’t too much of an issue for you at this point. Then the distributor of your dreams comes knocking and suddenly you’re in retail. Congrats.

What happens next seems to be relatively universal from what I’ve seen.

• They make you drop your prices
• Your margins are destroyed
• PRICE SENSITIVITY KICKS IN

Your product wasn’t too expensive at $14, so why is it now too expensive at $9.99?

You’re not there anymore.

You dropped the kids off at the store and they didn’t explain themselves properly. One of them bit a bigger kid and learnt their lesson pretty quick.

If I’m shopping on your website, I’m looking for your product, so when I find it I’m likely to buy it. If I’m shopping in store, I’m much more likely to be looking for any product that fits my need in your category. This is where comparison kicks in and you lose out to the big kids.

You’re not here to explain that your process is better, your cows are happier or your founder overcame gut issues with this exact product. So now I’m looking at you for $9.99 vs. Cholula for $6.50. I trust that lady, she’s in all the taco spots around town. “Imported from Mexico” seals the deal and you’re left on the shelf.

You no longer own your customers journey.

It’s just you and a sea of other products, and everyone is shouting.

Price sensitivity kicks in at retail when a key question can’t be answered by your customers. What’s in it for me?

If there was a headline it’s this: Retail is where great brands die from bad packaging.