Many retailers promise a payment if the customer finds a lower price on an item purchased from the retailer. These low-price guarantees are most popular at retailers that hold out their prices as a major reason for shopping with them. However, a low-price guarantee can be valuable for all retailers, as long as the guarantee is used strategically.
- Offer the guarantee on distinctive items. If your major marketing point is cut-rate prices, you might offer a low-price guarantee on every purchase. If your major marketing point is value, benefit from the draw of the low-price guarantee by offering it on selected items. Researchers at Wayne State University, Baylor University, University of Mersin (Turkey), and University of New Mexico found that with distinctive items, the low-price guarantee results in more customer satisfaction after a purchase, whereas with commodity items, the guarantee could encourage your regular customers to try out your competition.
- Keep it simple. Avoid promises like, “If you find a better price on the same item within 30 days at another store, bring us their receipt as evidence, and we’ll give you twice the amount of the difference.” To have this guarantee honored, the person would need to buy a second copy of the product and then bring the original one back to you for the money and then bring the second copy back to the other store to make a return. It’s more credible to say, “If within 30 days of your purchase, you find a lower price advertised on this item, bring us the ad and we’ll give you a credit for the difference.” Yes, this means that if you put an item on sale, customers who recently purchased it can request a credit. This is another reason for offering the guarantee just on selected items.
For your profitability:
Sell Well: What Really Moves Your Shoppers
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