Should You Offer a Price Match Guarantee?
Employee mindset is wrong – Ask your employees this question: If your Customers told you that they could get what you sell from some place else for significantly less, what would you do? What would you say to keep them? You will probably be disappointed at their answer. Too often when faced with that same scenario, employees act almost apologetic, and start offering the Customer more, or even worse, they discount to justify the price gap. The problem is, your front-line employees may not understand the true value of the services and products they are selling to the Customer.
New Paradigm on price match guarantees – I was inspired by reading Jeff Shore’s blog, Don’t Wage a Price War. Win Sales by Eliminating Your Competition. A paradigm shift is needed from selling a commodity someone can get anywhere to an experience Customers can only enjoy with your company. Everyone in your organization needs have this mindset:
We are the ultimate experience provider. We will not be oversold. In fact if you can find it more expensive somewhere else, we will raise our prices and match it.
Don’t compete in price wars; compete in experience wars – Sound crazy? Well if that was truly your mindset, if it was everyone’s mindset in your company, it would change your approach to the experience you provide. It would force us to deliver the ultimate experience. Personally, I get upset if I find out that someone is charging more for something either of my businesses sell. I start to think, what are they providing that we aren’t? Is it quality, consistency, or Customer service? What is it? We need to improve our game and be proud of what we charge relative to the experience we deliver.
*Related – Can you really Make Price Irrelevant?
Expensive cup of coffee or a free living room – About ten years ago, the first time I worked with Starbucks, I found out that some Baristas felt guilty about charging a Customer $5.00 for a cup of coffee. Why? Because that was more than 50% of their hourly pay. They couldn’t comprehend how someone could pay so much for a cup of coffee. So I started thinking about they REALLY sell. Then I remembered my favorite sitcom of all time, Friends with Ross, Rachelle, Chandler, etc. I remembered them hanging out in their favorite coffee house Central Perk, for hours laughing, having a good time, being “friends”. Then I thought about all the times I meet someone at a Starbucks. It may be an old friend from school, a potential client, neighbor, brother, or one of my kids. Rarely have I ever spent less than 45 minutes, talking, getting caught up, or building a relationship. Then it hit me, what a deal! They aren’t selling an expensive cup of coffee, they are selling really inexpensive rent on a living room for people to connect, hang out and enjoy each other’s company.
It is not just a Triple grande, non-fat decaf iced latte – it is the total experience — the warmth of beautiful surroundings, a friendly community of people that recognized you (Customers and staff), a consistent product, and a place to escape to for hours should they choose. When they realized how important that was to their Customer’s lives, it changed their perspective on what the Customers were getting for their money. Baristas went from feeling guilty to feeling proud of what they sold.
What does your company sell? I hope you have taken the time to truly use this exercise and fully develop something that is so strong that your newest employee runs home to tell their parent, spouse, or neighbor, “Hey, you know what business we are really in?”
*Related – Creating inspired moments in each Customer’s day
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