Everyone has a price

Everyone is price conscious these days, and no merchant can be afford to ignore the needs of bargain-hungry customers. But customers want more than that. (But that's not necessarily a bad thing - a small independent hasn't a hope of being the cheapest on everything they stock. They have to offer something different.)

Recent TRADA market research has given us a hit list of customer priorities when choosing a merchant. Price is there of course, but perhaps surprisingly not in the top spot. In fact the top 5 reasons are all pretty closely matched:

Given the slim differences between those percentages, it takes a brave observer to assign any kind of priority to the factors listed. Easier to just say: 'those are the five things that matter most to my customers. Ignore at my peril.'

Everyone knows it's cheaper to retain a new customer than to attract a new one. But it's nice to see it confirmed what they are looking for.

The list gives us a check on what we should look to maintain loyalty in lean trading times. For example, if we want to reduce our stock holding, this can't be at the expense of product availability. Our Business Intelligence tools will identify exactly the products your customer needs to know will always be in stock.

The same toolkit will also help you monitor your deliveries. Are you getting stuff out 'On Time and In Full' (OTIF)? If not, your customers will notice.

The engineering world has a phrase 'Cheap, light and strong. Pick two.' We might paraphrase that to 'cheap, quality, satisfaction.' Or some other variable. But the point is, you can only pick two. If you can identify why your customers will pay a premium, then you can charge for it. Cheap is good, but not always.

Some customer's eyes light up at the sight of the budget 20-piece toolkit you've stacked by the tills. Others will be happy to pay the same price for just one branded tool. Which is right? Well both of them really. As long as it's an informed choice. Your bargain hunter can't expect the toolkit to be used day-in, day-out to earn a living. But it may well do ten years service as an occasional item for the reluctant home DIY-er.

And your staff. Good, enthusiastic staff that know the products, the jobs they are being asked to do, and your customers are a priceless asset. Keep them happy, keep hold of them if you possibly can.

We can't tell you how to run your business, but these days, to borrow from Tesco, 'every little helps'. Maybe something in here will strike a chord. None of us can afford to be complacent after all. Things are difficult yes, but with intelligent use of Key Performance Indicators, you can keep an eye on the things that matter and ensure that you're still running the business the way you want to run it.