You may recall my previous post on value vs. price.
It seems as though the value vs. price war is all the rage during these tough economic times. While retailers are struggling to stay afloat, they still need to serve their customers to the best of their ability.
It’s a love/hate relationship that has endured since trade existed. As the product or service provider, if the customer says they’re right (even if they’re wrong), it’s your responsibility to keep it right – or cease calling your business a success.
Savvy shoppers will do their due diligence to ensure the price:value ratio on any product or service out there works in their favour. If it doesn’t, they either look elsewhere or save their money.
But that doesn’t mean that the price always needs to be low – you can practically set the price as high as you want. It’s all subjective.
When it comes to price adjustment, most customers are just looking for one word: justification.
Simply put, if you plan to raise your prices on widgets, there needs to be a corresponding value increase to justify the increase.
That said, justification is in the eye of the beholder. Very few would care less if your supplier had a bad harvest or lost a massive shipment. No sympathy lost there.
Justification can come in a variety of forms: bonus offers, freebies, discounts on other products, additional support, gift cards…the list goes on.
What’s crucial for the retailer is finding the delicate balance between digging into your profits in the name of good rapport vs. being a cheap-ass because you’re greedy – people out there know who I’m talking about.
Trust me…I’m all for maximizing profits, otherwise why are we running a business?
But sometimes, the old adage of “short term pain for long term gain” needs to be revisited once in awhile. You may very well need to take a financial pinch from time to time to maintain customer loyalty.
Just know where to draw the line…the last thing you want to do is hemorrhage your earnings because you are too nice.
A recent post on Retail Customer Experience promotes Emphasizing on Value. If prices need to be raised due to aforementioned circumstances, customers need more than a sob story.