Bully Purchasers
Marketers today at many companies are trying to take the focus off price and put it on value or customer experience or uniqueness or, well, just about anything else. The problem many of those same marketers then face are dealers or retailers who only want to focus on price. They don’t care about marketers efforts to connect with end customers by differentiating themselves in a way that ultimately should grow sales and margins. These “partners” only want to boost their own sales or traffic by discounting.
What’s a marketer to do?
Last week I attended CASCON, CAS America’s customer conference. One of the speakers talked about how a retailer his company sells through decided to put one of its products on special to draw traffic into the store. The sale went so well the retailer wanted to deepen the discount – but, unfortunately yet not surprisingly, pass the cost of doing so on to the manufacturer. When the company balked, the retailer’s response was something along the lines of: Well, if you want us to continue to stock your products you’ll support the discount price on this item while we have it on sale.
Ouch.
The manufacturer had no choice but to comply; that retailer is one of its largest customers. When that’s the approach of an organization that’s supposed to be a “partner,” everybody loses in the long-term. Yes, short-term earnings are a requisite of staying in business. But when those sales come at the cost of long-term profits, executives need to rethink their approach.
I’m all for getting my favorite products at a discount. But because they’re my favorite products, I’ll buy them whether they’re on sale or not – and I won’t purchase a competitor that is on sale. Instead of training consumers to focus so heavily on sale prices, perhaps it’s time that retailers work with manufacturers on calling attention to the differentiators that prompt people to pay a premium.
I know that approach doesn’t work for every product and every customer, but there are consumers willing to pay extra for softer toilet paper and cartoon character tooth brushes and fully equipped cars and sleek cell phones. Focusing on “value beyond price” mixed with the occasional value of a special price is perhaps a better approach to driving both short- and long-term gains.
