The price of price
What do customers want from you? Many businesses tell me and show me that customers want a product or service at the lowest price. Okay. How do you justify Heineken? How about Lexus? Or Disney World? None of those are cheap, and they seem to be doing just fine.
Some of us forget that there are 2 types of customers: transactional and relational. Transactional customers will spend a great deal of time and effort to find what they want at the lowest price. They'll visit, haggle, froogle until they can't stand it anymore. Winning means they get the best possible deal, no matter what. Losing is finding a better price after they've bought, and that thought haunts them.
Sure, you can get these customers. They'll come to you for a deal, and they'll buy from you if you meet the low price criteria. You'll end up with a low margin. You and your staff have to work hard because they shop around a lot. You'll smile through it all because they're "the customer" and you have to have them. Give 'em what they want. And then...they'll bail. If they sniffed out your sale price, they'll soon be called by someone else's. See, they're fickle. They'll make lovey-dovey eyes at you, for a sec, and then when someone else comes along...bye-bye. Each purchase has its own measuring stick--and the measuring never stops.
Live by price, die by price.
On the other hand, there are these relational customers out there. They want nothing more than to build a relationship with an expert. They aren't afraid to pay more; their greatest fear is buying the wrong thing. They want to find one vendor and stick with that vendor. Relationals want to be able to call and get what they want when they want it, but get this, they'll pay you for it. They understand that you have to make a profit. They don't initiate a whole new price seach each buying cycle. And, they're loyal friends and evangelists for you. Nice.
A lot of stores have sales that are Fri-Sat or Sun-Mon. There are coupons and deals for those days. Well, I hate to shop when everyone is shopping. I want to be there on Tuesday when the fitting rooms are available and it takes 30 seconds to check out. I'll pay more, I don't carry coupons and I'm there when the cashiers are bored. I think I'm a good customer. But they spend oodles of money targeting transactionals, not me.
Which customers are you targeting? What are we telling them in your ads?
Some of us forget that there are 2 types of customers: transactional and relational. Transactional customers will spend a great deal of time and effort to find what they want at the lowest price. They'll visit, haggle, froogle until they can't stand it anymore. Winning means they get the best possible deal, no matter what. Losing is finding a better price after they've bought, and that thought haunts them.
Sure, you can get these customers. They'll come to you for a deal, and they'll buy from you if you meet the low price criteria. You'll end up with a low margin. You and your staff have to work hard because they shop around a lot. You'll smile through it all because they're "the customer" and you have to have them. Give 'em what they want. And then...they'll bail. If they sniffed out your sale price, they'll soon be called by someone else's. See, they're fickle. They'll make lovey-dovey eyes at you, for a sec, and then when someone else comes along...bye-bye. Each purchase has its own measuring stick--and the measuring never stops.
Live by price, die by price.
On the other hand, there are these relational customers out there. They want nothing more than to build a relationship with an expert. They aren't afraid to pay more; their greatest fear is buying the wrong thing. They want to find one vendor and stick with that vendor. Relationals want to be able to call and get what they want when they want it, but get this, they'll pay you for it. They understand that you have to make a profit. They don't initiate a whole new price seach each buying cycle. And, they're loyal friends and evangelists for you. Nice.
A lot of stores have sales that are Fri-Sat or Sun-Mon. There are coupons and deals for those days. Well, I hate to shop when everyone is shopping. I want to be there on Tuesday when the fitting rooms are available and it takes 30 seconds to check out. I'll pay more, I don't carry coupons and I'm there when the cashiers are bored. I think I'm a good customer. But they spend oodles of money targeting transactionals, not me.
Which customers are you targeting? What are we telling them in your ads?
posted by Julie @ 5:11 PM
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