Jul

17

Compete on value rather than price

Henderson documented that the most successful businesses merchandise value not price. This means that they attract - and of equal importance - retain their customers because of a combination of reasons, that combined represent “value” as opposed to getting and keeping customers purely based on price. The independent retailers who survive must master this in the face of Wal-Mart and others like it.

I’ve also noticed that the more “complex” the relationship and the value delivered, the less likely a pure price marketer is to steal the business. For example, the industrial chemicals company that also removes and rehabs all the customer’s valves twice a year, provides a free fine-prevention safety audit annually by a retired OSHA inspector, a customer newsletter, 24 hour emergency trouble-shooting, easy ordering via e-mail or web site, and free classifieds for buying and selling used equipment on its web site creates “Complex Value Immunity” against a cut-price competitor. Or, for example, the retailer with a frequent buyers club, private sales, a newsletter, gift-with-purchase promotions, and an annual Super Bowl ticket drawing with tickets based on purchase points creates “Complex Value Immunity” against a cut-price competitor.

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Comments

Jul

17

Compete on value rather than price

Henderson documented that the most successful businesses merchandise value not price. This means that they attract - and of equal importance - retain their customers because of a combination of reasons, that combined represent “value” as opposed to getting and keeping customers purely based on price. The independent retailers who survive must master this in the face of Wal-Mart and others like it.

I’ve also noticed that the more “complex” the relationship and the value delivered, the less likely a pure price marketer is to steal the business. For example, the industrial chemicals company that also removes and rehabs all the customer’s valves twice a year, provides a free fine-prevention safety audit annually by a retired OSHA inspector, a customer newsletter, 24 hour emergency trouble-shooting, easy ordering via e-mail or web site, and free classifieds for buying and selling used equipment on its web site creates “Complex Value Immunity” against a cut-price competitor. Or, for example, the retailer with a frequent buyers club, private sales, a newsletter, gift-with-purchase promotions, and an annual Super Bowl ticket drawing with tickets based on purchase points creates “Complex Value Immunity” against a cut-price competitor.

No Tags
Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages.

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