Sunday, November 6, 2011

Protect Customers Against Price Decreases

KTRK-TV Action13 in Houston, Texas reported last week on low-price guarantees. They say that a handful of retailers will price match for about one to four weeks after purchase: If you find a lower price under equivalent conditions, return to the store for a credit.
     Because Walmart is such a major player in retailing, note that company’s current promotion when deciding if and how you’ll offer a low-price guarantee. Up through Christmas Day, Walmart purchases are accompanied by a promise that if purchasers find any of the items being sold cheaper at any store, including Walmart itself, they can claim a Walmart gift card for the difference.
     Also take note of the catalog of exceptions Walmart sets on the promise: Black Friday ads, offers with gift cards, limited time or limited quantity offers, fall décor items, food and grocery items, internet pricing, and more.
     If you choose not to have a low-price guarantee, you might answer customer questions about Walmart’s offer by pointing out how many transaction types are not covered. You could also point out that the customer must spend time and money returning to Walmart to have the guarantee honored and would not get a cash refund.
     On the other hand, if you do, as a small to midsize retailer, decide to offer a low-price guarantee, researchers at Wayne State University and Babson College recommend you attend to how you present the promise. It’s best done as protection for the purchaser: “Our store wants to protect you against the risks of prices going lower after your purchase.”
     This is better than a small to midsize retailer presenting the low price guarantee as a promise the store holds itself out as a low-cost leader. The Wayne State/Babson researchers found that this second alternative resulted in more post-purchase regret than the protection alternative whenever the customer did find a lower price elsewhere. This was true even after the difference-in-price was delivered. The “I was protected” consumers feel a promise has been honored. The “I came across a better price” consumers feel a trust has been violated.
     Along with this, researchers at Wayne State University, Baylor University, University of Mersin (Turkey), and University of New Mexico found that with items distinctive to your store, low-price guarantees result in more customer satisfaction after a purchase, whereas with commodity items, the guarantee could encourage your regular customers to start exploring your competition.

Click below for more:
Guarantee with Care
Use Low-Price Guarantees Strategically
Impassion Your Shoppers

No comments:

Post a Comment