What I Learned On My Summer Vacation
Avoiding the lowest price paradox and giving customers what they really want
This past week, I gained a new perspective on ecommerce from the most unlikely of places - a shopping bazaar in Ensenada, Mexico. While on vacation, I was treated to the experience of being forced to run the gauntlet of 200+ shops in order to reach my destination of La Bufadora. During this 1/4 mile trek, I noticed that almost every shop was carrying the exact same products. As a result, the shop owners decided that the only way to differentiate themselves from everyone else on the street was by price. So, they yelled, they screamed, they barked and even tried to block my path in order to get me into their stores.
For most shoppers, going online to shop is similar to what I experienced in Ensenada. Everyone seems to have the same products, so stores resort to the lowest common denominator to get sales - pushing the "lowest price". Shopping comparison sites don't help matters, as their primary goal is to point shoppers to the store with the lowest price. So how do we avoid falling into the "lowest price" trap? We focus on the other customer needs.
Back in college, we all learned about customer needs. In most cases, you probably got a list of five needs that was something along the lines of service, price, quality, action and appreciation. Somewhere down the line though, we ended up becoming the equivalent of the tienda barker, trying to draw customers in with promises of huge discounts and the lowest price on the planet.
The lesson I learned from running the Ensenada gauntlet? I don't care who has the lowest price. I just wanted a low hassle place to get my souvenirs. I steered clear of the "40% off" barkers and went into the store that didn't seem completely desperate. I selected my products, struck a quick deal and was done shopping. While some of the other folks were stuck bouncing from shop to shop trying to save an extra fifty cents on a poncho, I was able to take the time to enjoy La Bufadora.
As an ecommerce marketer, next time you get tempted to run a "lowest price" ad, think about the other ways you can differentiate yourself for the customer. In the long run, you'll end up with a happier customer who has a better shopping experience. More often than not, this is the type of experience that translates into repeat business and lifetime customers, which is the whole point, isn't it?
3 Comments
Charles Bradley says:
Hi Mike, when I in college I worked a flea market with my friend in San Jose, Ca. We played "KPIG" radio and visited with the people. We went for loud and quick close. I am just entering into Ecommerce and am starting with relationship and planning to use the website for easy order entry. Does this sound right for office furniture. Charles Bradley charles@btobfurniture.com
Mike Feiman says:
Charles, I would absolutely focus on relationship building! There's so much temptation to go for the quick sale, but when you work in the cost of acquiring each customer, you'll find that in the long run it is far more profitable to create an experience that caters to the customer's needs. If you can build relationships, you'll end up gaining customers instead of just making sales.
Casey says:
I agree with you, when I decide on purchasing a service I will focus more on the customer support they can offer me-and I am willing to pay more for a service that will provide good customer service. It’s a strong point when it comes to creating customer loyalty.
