Saturday, July 20, 2024

The psychology of a lower price

by David Specht

Last week, I wrote a column in the Minden Press-Herald about the retail community uniting for the greater good of all. Saturday, I received an email from a reader who took exception to my assertions. Well, sort of.

“I have tried to do that but people do not want you to shop in Minden,” the reader said.

Surely he is misinformed. He can’t really mean that. Or can he?

The email went on to lament the sales tax rates in town, and the economic development tax incentives. While those are things that must be considered, his next “reason” is what stood out.

“I have bought parts for my truck here. The one part that comes to mind real often cost me $75.00 in Minden. I called my parts man in Shreveport. He delivered the exact same part (manufacturer) to my doorstep for $45.00. Not the 1st time this has happened.”

Is this an isolated incident? Perhaps. However, a lesson can be learned from his assertions.

First and foremost, are we comparing our pricing structure with against our competitors. We know that many small businesses cannot compete with the bulk buying power of larger retailers, but are we even trying?

When I was a shoe salesman for a sporting goods retailer, we were required to go to the mall from time to time to compare prices on the same shoes. Most of the time, we were the lowest price, but sometimes we weren’t. That knowledge helped me sell better, citing value and customer service as worth the few dollars extra.

Speaking of which, are we telling our customers about our value? There is value in convenience, customer service, and even community support. But, if we do not convey that message on a consistent basis, can we blame customers for simply seeking out the lowest price?

Everyone in the organization should know how their prices compares to others, and the value attached to doing business with them. Advertise the value. Talk about the value. Sell the value.

And, if you are almost twice as high on price as your competitor, lower it.

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