When You Match Price, Do You Also Match Value?
Recently one of my service advisors (who is no longer with us, by the way) matched a price on a set of tires to a competitor. I felt the need to share with you the thoughts and comments on pricing I sent to my manager after hearing about this, so you will find them below…
Would anyone walk into a Starbucks and ask to lower or match their price on a cup of coffee? We all know the answer to this. Starbucks doesn’t just sell coffee. They sell something special; they sell the experience, the friendly service, and the connection they make with you as the customer. The truth is, you can buy coffee anywhere, but you can’t get a Starbucks anywhere. You need to think of your brand in the same way.
There are basically three reasons why people compare prices. One: they truly are price shoppers. These are people we will never please and to be honest we don’t need or want them.
Two: the person does not see the value in what you are selling. That’s why you need to promote the benefits of what you are selling to the compared item or service. For example, in the case of tire price matching, tires are often considered a commodity and are easily shopped with a phone call or Internet search. So, how do you position your price and stick by it? You do it with a series of questions that highlights the benefits and reasons why you are the best choice.
Ask the customer what the warranty is, and if the competitor offers lifetime rotations, flats fixed free or roadside assistance. Ask the customer:” Wouldn’t you want to come here for all your needs, rather than jump around? Plus you have trusted us in the past with all your automotive needs, so you know I am going to do the best for you, because the dealer does not have the people that we have here at Osceola Garage.”
Also, ask the customer if the competitor’s price includes mount and balance, state recycle fees, wheel alignment, and all other incidentals. Get the customer to understand that your price comes with value. And let’s be honest, can we really trust the competitor’s price that the customer gave us?
And the third reason why people ask about and compare prices is that they don’t know what else to ask. Again, this is when you need to promote value over price.
I am not a fan of discounting and lowering my prices. We have spent countless hours doing the math. We understand that our price structure is in place to remain profitable. Are we competitive? Well, that depends on your perspective. If you are strictly a price shopper, the answer is no. If you are someone that wants to build a solid relationship with a company that values people and has the right ethics, the right morals, and offers benefits you can’t get anywhere else; then YES, we are competitive, because there are no other companies like us.
Remember, price is what you pay, and value is what you get.