Appliance Retailer’s longest standing writer, retail trainer Bob Johnson, died suddenly last week. To honour his incredible contribution to the industry in general and our publication specifically, this week we will be presenting a special series called The Best of Bob. Each day we’ll publish a standout piece from his remarkable 20 years of service columns for Appliance Retailer.
Just as true today as it was when first published in 1999, even if the products in question are a little outdated, here’s Bob’s take on competing on price alone…
Selling on price only… it’s been nice knowing you
By Bob Johnson
Remember the 1970s and 1980s when those of us who were part of this exciting industry experienced a minor revolution with the long awaited introduction of colour television and the product that changed our lives forever, the video tape recorder.
The buying public lined up in our stores with many waiting several weeks to own one or both of these highly prized home entertainers. Demand outstripped supply, stock shipments were allocated as suppliers tried to keep retailers happy.
Eager to cash in on this buying frenzy, new retailers sprung up from across the country. But to get into the game, the needed to draw people away from those retailers with established reputations and loyal customers who had a share of heart and mind. The new players could not afford to wait so they went for share of pocket.
Such was the impact that many of you will be able to rattle off six or seven of their names with ease, a common theme was the word ‘discounts’ in the store name.
It was open warfare and some retailers even refused to speak to others, attend the same product releases and relationships with suppliers were strained and many severed. There were winners and losers but the biggest winner was the customer.
Where are those discounters now? Many disappeared as the result of the downward spiraling bottom-line results. Others were astute enough to grow with the times and made subtle changes to their name and image by dropping the D-word.
Unfortunately this period encouraged, even taught our customers to shop in a different way. Sales assistants would say things like: “Well shop around, get your best price then bring it back to me and I’ll beat it!”
There will always be people who shop for price only, however, there are many others who don’t like the whole time-consuming process. Many people tell me that where the product and service is similar in all the stores they visit the only noticeable differentiating factor is the price. So the sale goes to the lowest bidder.
If we could just add value for these people we would greatly increase our chance of getting the sale and building customer loyalty as well. To add value you must first know what it is that the customer values.
Slice of Life
I recently fell in love with a JVC mini hi-fi I saw at my local friendly appliance retailer. I saw it again at a duty free store on my way overseas a week or so later. Good price, but too much of a hassle to carry, so I decided I would buy one locally when I returned.
First week home I raced back to the local, friendly appliance retailer still very much in love.
“Yeah, they’re quite a nice little system,” the sales assistant said.
‘Quite nice?’ I thought.
But I’m in love. I’ve been dreaming about this moment for five weeks. As the retailer proceeded to clinically dissect this thing of beauty, telling me all about the technical specs, the excitement drained. In a few minutes all that was left of my dream was a few boxes full of watts RMS and woofers and tweeters and the reassuring words, “We’ll work something out when you’re ready to buy”.
I was ready to buy; the salesperson just wasn’t ready to sell it to me. Price wasn’t high on my list of priorities. If it had been, I would’ve bought it duty free.
Not one question about what I valued or what I currently play my music on or a dozen other questions that would have given me the feeling the retailer had my interests at heart. If you are selling exciting products to excited customers, it makes sense for you to tune in and get excited about it too.
The story had a happy ending because I sought a second opinion from another retailer. After asking a few pertinent questions he advised me to take the next system up the range.
People are spending again but they are not about to give their hard earned money away easily; they are going to make you work harder to get it by providing more than a price list. You have to establish what it is they value and then give it to them in spades.
Another great column by Bob. Funny to think that even though CD players and TVs and, especially, VCRs are from a time gone by, there are still reports of sales staff focusing too much on price and not on satisfying the customers.
Here are the links to all five entries in the Best of Bob:
Nothing happens in retailing unless you make it happen
Selling on price only… it’s been nice knowing you
You don’t have to be better… …just try being different!
The Simple Art of Merchandising
The Big Four customer objections — and how to handle them
(Commentary by Patrick Avenell. Additional research by Damon Apter.)