So far, my series about Loyalists (or those who purchase the majority of their pool products at one single specialty retail store) has covered three P’s of marketing: product, place and people. But no analysis would be complete without exploring a fourth P, and that is price. In doing so, we were able to test the old adage repeated often by Warren Buffet: price is what you pay; value is what you get.
On its own, the competitive price advantage is limited
Only 34 percent of Loyalists see competitive price as an advantage. That does not come as a surprise. After all, how many people seek out a specialty pool retail store solely because of competitive prices? Still, there is an opportunity to learn from this finding. More than a third of all Loyalists say they do see the advantage of competitive pricing at their specialty retailer versus other outlets — that in itself is quite amazing.
Higher satisfaction by Loyalists who see the advantage
Another surprise is that 55 percent of Loyalists who do see the advantage are extremely satisfied with the overall value received from their retailer. So what could be going on here? It is likely that as shoppers become Loyalists, they begin to recognize other advantages provided by their retailer. Then they see price in a different way. I believe it is because Loyalists have a greater appreciation for the overall value of the combination of advantages provided by the retailer. In other words, even though specialty retail prices may be higher, other advantages such as knowledgeable employees, product range/availability and service provide Loyalists a great deal of value for their dollar.
Competitive price advantages rely on people
As I’ve said before, most pool products have a degree of complexity that require product knowledge and superior service to create advantage. Helping Loyalists see the overall price-value relationship relies heavily on the interaction with consumers to bring advantages to life. Our research specifically points to knowledgeable employees, superior service and product range/availability as vitally linked to overall value. I will explore the impact of mixed advantages in my next blog as I begin to reveal the “secret sauce” recipe for retailers.
Just like other passive advantages, if you don’t have sufficiently competitive prices, perhaps nothing else matters. But the perception of competitive prices can be an advantage when seen in combination with knowledgeable advice and service. The research continues to point out the importance of training and staff management to create a competitive advantage for the specialty pool retailer.
Your turn:
- How do you look at pricing in conjunction with your other services?
- What specific examples can you share about selling value versus price?
- How are your employees performing in this area?
- What are your biggest needs to help your employees succeed in selling value?
- What have you learned in this area that would help readers?
Read the previous post in this series: Do Loyal Consumers See Advantages in Your Product Line?
