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Tuesday, July 1, 2014

How To Encourage Your Customers To Go Elsewhere

My fiscal year ended yesterday for this business.  I know, it sounds like a pain in the butt, but I actually get my CPA fees much cheaper, as CPA firms don't have much business after the April 15th tax rush.

Always looking to save a buck.

Anyways, I decided to pry open the old checkbook and upgrade my version of Quickbooks Pro.  Start the new fiscal year with a nice, clean slate.

I happen to be out and about, so I stop at Office Depot.  It's near my home, and they're generally a good bunch of folks at this store.  Particularly in the printing department, where I get most of my lower-end marketing materials printed.

I find Quickbooks Pro 2014.  It's priced at $199.95 - with tax, that's $216.95 out the door.  I whip out my smart phone, and say, "Quickbooks pro discounts."  DING!  Up pops a Walmart ad showing it at $179.95.  I ask some propeller-head walking the aisles if they do price matching.  Yep.

Cool.  He gets on his walkie-talkie, and lets the register know a "price match customer" is on the way up.  I show the lady at the checkstand my phone, with the Walmart page at the reduced price.

She then gets on the walkie-talkie system and calls for someone to bring me the actual software, as they only have display boxes on the floor. 

Dude shows up with the wrong version.

Off he trots, gets the new one and again asks to see the reduced price.  My smart phone still has the page up, and he says, "I can't find that price on their page on the computer in back.  I think what you've got is a cached page from an old ad."

Mildly insulted - as he's insinuating I'm trying to rip him off - while at the same time, mildly proud that he believed this old fart knew how to do that (I do, by the way!).

I refresh the page, show him it's actually the Walmart page, and it's the mobile site.

"I still can't find it."  Goodness, this isn't in my job description. 

We walk over to a PC, and I say that perhaps Wally World is having a bigger discount for mobile users.  I don't know, and I don't care.  I tell him the steps I went through to get the page.  Am I going to get the discount or not?

He's having none of it.

"Well, sir, I have to find it online.  Our policy says that if the manager (that's HIM!) can't find the discount online, it's not allowed.  I'll be happy to give you our $199.95 price." 

I almost hit him in the head.

I give him one more shot:  "You're saying that because YOU can't find the exact same thing I found - even after I've told you how to find it on YOUR smart phone - you won't match the price of one of your competitors.  You're going to penalize me because of your incompetence?"

That went over like a lead turd, although it did get a chuckle from the check out lady.  Hell, I was leaving anyway, so I might as well have some fun in the process.

I get home, do an exhaustive, mind-bending search... that took 38 seconds... and found a little company that had the software for me to download.  Maybe you've heard of them -  I think they're going places...

They've got it for $169.95.  And no sales tax.  It took 4 1/2 minutes to download.  Less time than I spent with the manager trying to show him how to do his job.

Regular $199.95 + tax = $216.95 out the door
Sale $179.95 + tax = $195.25 out the door
Amazon $169.95 out the door

All in, I saved $47 - nearly a 22% savings.  I need to send the mouth-breathing, soft-headed manager a thank you card.

So, what did we learn today?

If you're a business in a highly competitive industry, build your sales structure to allow your employees to retain the customers that come in the door.  It's expensive to get them there - better make a couple of bucks while you've got them.

If you don't trust your managers enough to have the flexibility to make decisions, you either have the wrong person in the job, or your business model is too rigid to withstand change.

Now, Office Depot obviously knows about Walmart and  All three of them compete on the Internet for sales of office and business items.  With online purchases, the out-the-door price is the primary sales driver, as whatever you order will be there in a couple of days, regardless of which company you choose.

With software and digital media, price is ALL that matters.  Click, click, clickity-click, and you're done.

Office Depot fairly chased me out of their store into the arms of Amazon.  Perhaps Amazon should send the manager a thank you card as well.

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Copyright 2014 Bison Risk Management Associates. All rights reserved. Please note that in addition to owning Bison Risk Management, Chief Instructor is also a partner in a precious metals business. You are encouraged to repost this information so long as it is credited to Bison Risk Management Associates.


Anonymous said...

Had a similar discussion some years back with a manager at the now long defunct Circuit City - he would price match to the Best Buy down the street but not an internet price. I pointed out his biggest business threats were not the blue and yellow store blocks away but 4 stores in CA, 1 in Texas and 3 in NY who were beating his price.

"We don't match internet pricing. We have no way to determine if it's real."

My speakers took four days to come from CA.....

As an aside, I noticed that all 3 Orifice Despot stores near me have reduced their floor space in the past few months, one by 65%, with the concomitant reduction in number of items carried. The two Staples near me haven't. And neither has Amazon.....

Chief Instructor said...

These businesses aren't accepting that the marketplace has changed. To get people to pay full-freight, you've got to have an impulse item, an emergency item (printer ink, in the supply biz could be an example), something unique or something that conveys extra value.

Your speakers and my software didn't meet any of those requirements, and I can't believe too many items in a office supply store would do so.