The Price Match Game
Grabbing back the sale from an online or down the street retail competitor can be fun.
Twenty years is a long time in the entertainment industry and if you were watching television some time between the Everly Brothers warbling “I’ll Do My Crying in the Rain” (1962) and John Mellencamp belting out “Hurts So Good” (1982) then you probably saw Gene Rayburn host a show called “The Match Game.”
During the 20 years that show aired there were a few different versions but essentially it worked like this. A contestant and a panel of “celebrities” were given a question and they secretly wrote down their answer. The contestant scored points based on how many celebs matched their answer. The more matches, the better the odds of winning the game.
These days in our retail world, you may find yourself playing a “Match Game” of sorts. It’s the times that shoppers come into your store asking you to match a price from another merchandise supplier.
Despite some in-depth research which consisted of checking Wikipedia, Google, and eating a cookie, I could not determine when Price Matching started. It probably was around the first half of the last century when gas stations started to post their price (18 cents a gallon?). As we cruised through the 1950s and 1960s merchandise and the money to pay for it was widely available, and price shopping and matching became more prevalent.
Retailers used to only worry about the store down the street. Next came those darned 800 phone number lines, then big box stores, and now people can check prices on the interworld webby thing on their iFruit phone while sitting in your store.
No matter what the weather is, you might be crying in the rain every time your shopper wants to take advantage of your local service, expertise, inventory, and delivery, but wants to pay the same price as some cyber store. You can curse the online retailer, or you can use your selling skills to win the sale and salvage some margin.
Imagine you decide to buy one of those fancy mondo tractor lawnmowers to keep your 100’ x 100’ hunk of heaven yard well-trimmed. You know the model you want and go to shop two places. Your first stop is at Farm and Home Superstore where the price is $3,600. You tell the clerk that you want to shop one more store and she tells you no matter where you go, they will match any price.
Next stop is Seed and Feed Country Market. Right at the front (barn) door is the same exact brand and model tractor lawnmower and it’s only $3,400!
What would you do? Flash your credit card at Seed and Feed-or go back to Farm and Home and ask them to match price?
I’ve asked a similar question to over 500 retail store owners, managers, salespeople and my everlovin’ bride. And almost all of them tell me they would just buy it at Seed and Feed. They do it because it saves time and it’s silly to drive back to another store just to get the same price.
Here’s the harder question: Under what circumstances would you go back to Farm and Home and ask them to match price?
After some deep thinking, here is what people tell me why they would go back:
- Seed and Feed doesn’t have the tractor in stock, it takes too long to get
- The tractor at Seed and Feed is a floor sample
- The tractor at Seed and Feed is damaged
- Seed and Feed charges more for delivery
- I didn’t like the credit terms at Seed and Feed
- Seed and Feed charges extra for set up and assembly
- I don’t trust that Seed and Feed will meet my needs
All good reasons! And while the product is the same, in each case something is different. Even if your shopper tells you they prefer to shop locally but want a different price, that really means they don’t trust the online retailer to fulfill their needs as well as you can.
Grabbing back the sale from an online or down the street competitor can be fun. Check out this easy to remember dialogue.
Shopper: I want to buy this $1,299 item from you, but I saw it elsewhere for $999.
Salesperson: Wow! $999 for this item. Are you sure it’s the same?
Shopper: (with printout of ad/webpage): Yes, here is the store and item.
Salesperson: That’s a heck of a deal. Why didn’t you buy it?
Shopper: They are out of stock for a month (or any of the other reasons above).
In my old selling days, I would just smile and reply “Yep, our price is $999 when we can’t get it too!” But times have changed. Now we can reason with the customer and explain the differences in availability, service, product condition, or cost of financing.
The fact is, you may not be able to retain your full selling price, but you also don’t have to cave in to losing some retail margin either. Explain that you are the local dealer, with an investment in inventory and service personnel. You can let them know you can’t sell it for $999, but you could help them out at $1,199. No one likes to lose margin, but it hurts so good when you capture a sale from those other guys!
One final point of advice: get ahead of the game. Do your research now before the shopper comes in. Understand the selling terms and fine print for the stores down the street, in the next state and anyone online who sells your products. Know where you beat them, and where you need to become more competitive. Sales and terms change often; for best results, repeat this research weekly.