competitive pricing

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13 01, 2015

Price Doesn’t Matter, To Whom?

By |2017-03-03T12:06:54-05:00January 13th, 2015|Categories: Blog|Tags: , , |3 Comments

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Don't be fooled, it matters to everyone.

Don’t be fooled, it matters to everyone.

There seems to be a fallacy afoot that there is a group of people who are not concerned about price. Rubbish I say. Anyone with a lot of money didn’t get wealthy by making foolish choices. You only keep money by not making bad deals.

This doesn’t mean that every customer should be shown the cheapest goods you have. The other day I was in a flooring store, and the salesperson was waiting on one of her “special customers. The customer apparently has money and spends it.  The owner called the salesperson aside and suggested she be careful with her pricing. He was afraid she would turn him off my showing him the more expensive goods. I heard her say, “His wife likes nice things, and he doesn’t deny her anything. Besides, who wants to look at the junk?” As far as I’m concerned, case closed. I asked the owner about it afterward, and he had a completely different take on it.

“I’m afraid if we show them expensive merchandise they will think we’re after all their money!” It’s amazing what people think.

In my opinion, the problem is that salespeople are not sure how to handle  customer reactions. Everyone has their own ideas about what turns someone off.  It can be a look, a hesitation or just not responding to a question. At this stage in our lives, we should know that it’s pretty impossible to tell what anyone is thinking unless you know them very well. And if you watch any of the crime shows, you know that’s not that accurate.

Why wouldn’t you want to show your best products, the ones you are most proud of?  You know, the products that are unique and worth every penny of their price.

I was at the Lexus dealer having an antenna installed. I wandered to the sales showroom and told the salesperson I was looking for a preowned, older Lexus convertible. It didn’t take him more than a minute to show me a new one. I repeated I wanted a used one but that didn’t stop him. He said I might want to look at the features of a new one, so I would have something to compare. He was right, it made me stop in think; do I want to do without the heated seats.  I pretended like I didn’t care but he obviously had some good training.

Like the produce in Walmart, if I hadn’t been somewhere else, I wouldn’t have a basis of comparison.

My suggestion is to have products in every price point that are really valuable for the money. Ultimately the customer will be in charge of the final decision.

Lisbeth Calandrino has been doing coaching and sales training for over 20 years. Like her dad, she went to the retail school of “hard knocks,” learning by doing. She retired after 14 years of being part of a retail chain of flooring and furniture stores in the Northeast. She is convinced the best salespeople have very little to say; instead they know the right questions to get the customer to think. To schedule a consultation or have her speak at your business, reach her at [email protected]. She lives in Historic Hudson Park, Albany, New York with her cat Rainyday.

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9 03, 2013

How Lowe’s Found A Way To Benefit From Home Depot

By |2017-03-03T12:07:02-05:00March 9th, 2013|Categories: Blog, Competitive Advantage|Tags: , , , , , , , |2 Comments

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Women like clean stores If you ask a business owner what they do better than their competitors, they’ll all tell you they deliver the best customer service. If you ask them to define customer service they will talk about pricing, products and all the usual things.

If you’re in the floor covering business,  having competitive pricing, a good selection,  competent installers and being nice to the customers is not customer service.

This is what’s expected in the industry; it’s the price you pay to be in business. Once you deliver the basics, you can begin to think about customer service.

In order to deliver customer service you must know your customers and your competitors. Without a clear understanding of these two, you can’t possibly begin to deliver your drop dead customer service. You can’t know too much about your competitors or your target customer.

Lowe’s Companies is a great example of the new guy on the block with a great  understanding of the competitor and their customers. With this knowledge, they’ve been able to  establish a prominent position in the market place.

Lowe’s Companies was originally opened as Lowe’s North Wilkesboro Hardware in North Wilkesboro, North Carolina in 1921 by Lucius Lowe.

Throughout the years, Lowe’s went through various formats, name changes and partners. In 1961 Robert Strickland and Leonard Herring took the company public. By 1962 Lowe’s operated 21 stores and reported annual revenues of $32 million.

In the 1980’s,  Lowe’s began to feel the pressure from the economy and the new competitor, The Home Depot. Lowe’s format was smaller stores and located in more rural settings and they were considering entry into a larger, unknown marketplace.  They probably knew if they didn’t change and become a big box store, they would be history.

Lowe’s took an interesting tact; they started opening across the street from their competitor– The Home Depot.

Many people were astounded by this move; why would you open across the street from your major competitor? Wouldn’t this be suicide?I thought so.

Despite being the new guy on the block, Lowe’s had developed a strategy that allowed them to penetrate the large markets and sit side by side with their largest competitor.

Opening across the street took a lot of moxie. Lowe’s looked like their competitor and carried most of the same products. How did they expect to thrive?

Here are things that Lowe’s understood about their competitor. The competitor had more money, had been established in these large marketplaces, and spent more on advertising. If Lowe’s could determine a competitive advantage, they would benefit from The Home Depot’s aggressive stance in the marketplace. They were bound to get customers by just being across the street.

Lowe’s also knew from the beginning,  the Depot’s primary customer was the construction trade. Early in the game, Lowe’s decided their customer was a female. This was before pink hard hats and red hammers were popular.

Did Lowe’s know they were ahead of the new female consumer trend or were they just trying to establish their presence?

The Lowe’s stores were squeaky clean. Their associates carried cell phones and the overhead paging system was gone. The stores carried household items that were not available in the Depot. They carried items such as small appliances, shower curtains and a huge quantity of window treatments and small lamps.

Customers would often complain about having to bend over to pick up something in the Home Depot and find their clothes filthy. In addition their kids were crawling under racks and coming out covered with dust bunnies.

The female customer noticed the difference between the two stores and the word was out. Lowe’s was for women and Home Depot was for men.

At one point while doing training at Lowe’s I was asked by a manager what did I think the associates should be doing when they didn’t have a customer.  I suggested they call their customers and follow-up on their installations. I was quickly told it would be better if they continued cleaning because women hate dirty stores! Wrong answer.

This is a great lesson for any business.  Can you both compete and benefit from your competitor? Most business worry about how to compete and don’t think about how to benefit from their competitor and what they’ve bought to the marketplace.

I was told by a large mall builder that if you have a new product, it’s often  better to let someone else blaze the trail. Trail blazing is expensive and doesn’t always work. If it works, it’s time for you to come and benefit from your competitor’s hard work. Just give it a new twist and the road to success will be less costly.

Looking for more on competition? Check out my blog on The Times Union,

Lisbeth helps businesses build loyal relationships with their customers through customer service training and social media marketing. Her book, Red Hot Customer Service can be purchased at her web site,



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