Earlier this month, I looked at the “Price Drop Conundrum” and the challenge of competing when customers demand lower prices. Today I came across an article on OPEN Forum that brings up another important aspect of price competition—the Internet. The article is called “What’s Your Response To ‘I Can Get It Cheaper On The Internet’?”
These days, customers are informed—they are empowered by the Internet. Just as the Web can be great for marketing your company and networking, it can be bad for business when customers focus on price alone and don’t see the big picture. Internet discounters abound—it’s easy for them to sell product at a lower price with no service to back it up. This means it’s incredibly easy for your customers to find a lower price somewhere else.
In the article, Ann Handley shares a real-life example of a customer who comes to an unnamed appliance company with prices from the Web. To win his business, the customer says to the retailer: “You will have to offer prices that are lower than what’s immediately available in retail stores and online.” So how did the business owner respond? Perhaps with a little too much emotion: “Because you don’t seem to trust me, I think you should now become your own ‘appliance guy.’ Did you ever hear the term ‘value-add’? Good luck.”
While the appliance retailer’s guttural response was probably somewhat therapeutic, it’s not going to win the account, and it’s certainly not going to foster any referral business. The irony of his comments is that the customer probably doesn’t understand the idea of value-added services. True, some customers cannot be converted from their price-centric mindset, and this may have been one of them. He may not be worth the time, but I can bet he’ll remember his experience.
So I ask you: How do you respond to Internet pricing? What strategies do you have for bringing customers around to see the value of “value-add”?
I asked four IT professionals about the future of technology in the gases and welding industry. Here’s what they had to say:
