For the longest time I believed people bought primarily on price. The lower the price the better the chance someone would buy. Everyone loves a bargain right?
These days there are smart phone aps that allow you to stand in one store and check a competitor’s price right then. If the other location has something cheaper – you leave, go across town, and buy the same item for less money. As a retailer – you needn’t be afraid, but it should be on your mind as you do business. Be aware of price.
My Dad is a good consumer and he price shops (he also reads this newsletter). He’d drive across town to buy gas that is five cents per gallon cheaper. But even my Dad has his limits and as price conscious as he may be, it isn’t always the lowest priced place that gets his business.
During the winters he’s out in the Phoenix area and while he could choose a .99 cent tostada from Taco Bell on his Monday Night Mexican dinners, he never does. The tostada at his favorite place probably costs five or ten times as much – and he doesn’t use a smart phone to do a price check analysis.
People can spend less, but can they get what it is you offer? While they can scan a price with their iPhone and see if it is less at the Big Box Store nearby, they can’t necessarily get the specific service you provide, the helpful tip your staff passes along, or the feeling of being known by name. They can’t count the economic velocity of keeping dollars “local”.
If you live by low prices – you’ll quickly learn – there’s probably someone who has them even lower.
Build value, offer a fair price and create an atmosphere people enjoy enough they’d pay a little more for the added experience. Then people will choose to do business with you – on purpose. Perhaps someday, Taco Bell will do fresh tableside guacamole and serve an ice cold margarita, but until then folks like my Dad are going to pay a few bucks more for their tostadas.