Price Matching: Version 2.0 - ResidentialSystems.com

Price Matching: Version 2.0

The Internet has changed everything, making the world a smaller and far more accessible place. You can become an expert on any subject no matter how arcane, find and connect with old friends, watch your favorite obscure Japanese game show, or just order some chocolate-covered insects, all without needing to put on a p
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The Internet has changed everything, making the world a smaller and far more accessible place. You can become an expert on any subject no matter how arcane, find and connect with old friends, watch your favorite obscure Japanese game show, or just order some chocolate-covered insects, all without needing to put on a pair of pants. Whatever your fetish or fantasy, the Internet stands ready, 24/7, ready to serve.

For the audio/video retailer, the Internet also has opened up a whole new frontier of product comparison. In the past, the local Hi-Fi shop was the unquestioned expert. People came to their local store after having built up trust over many visits – sometimes year’s worth – and would seek advice about a new upgrade, have a demonstration, and then make a purchase. Now, anyone with a keyboard, Internet connection, and some time on their hands can become an instant “expert.”

“I read in such-and-such forum that this thing was garbage. Anyone with half a brain is waiting for the new model.”

“Well, this forum said that it was good, but only if you use analog inputs and then listen to everything in DTS Neo 6 music mode. And use 15-guage speaker wire.”

“AudioGuy1138 says that replacing the power cord with the one from his chainsaw really opened up the sound!”

Sure, there are some voices of reason out there, but it can be difficult for many people to wade through the weeds to get to the wheat. The same is true with pricing. Nearly any product can be found on the Internet at prices that would make most wholesale price sheets gasp like someone just threw open the shower curtain. And no matter how many promises a manufacturer makes of “exclusivity” or “protected line” or “they police Internet sales,” the truth is that the Internet is now a real competitor for sales with people looking to purchase a one-off item.

People shop online. They feel comfortable shopping online. They aren’t scared of shopping online. And in many cases they actually prefer shopping online. And the boogie man of “you’re not gonna have a warranty!” or “your money is fueling Somalia pirates!” just doesn’t work.

But they also like the idea of having their Internet pricing cake and eating your service and support too.

Recently, we had an experience at our store that felt like an unwinnable solution; where no matter how it was handled, someone – me (the dealer) or him (the customer) – was going to end up feeling slighted.

It all started innocently enough with someone calling for a price on a new receiver. (The brand isn’t important, save for this was a brand that just months before our rep had promised was going to be exclusive to custom houses like our own, very tightly controlled distribution, blah-blah.) So my salesman explains the features and options of the unit and quotes him the MAP price. The customer calls back like 30 minutes later. He’s found a much lower price on Amazon. Will we match it? Our salesman does a great job of discussing why our price is what it is, and why buying from a local, established, post-sale-supporting dealer has value, and in the conversation manages to bump the guy up to the next level in the manufacturer’s line-up, to a receiver in the $1,400 range. Again, he finds a lower price; can we match it? So, we sell the unit for $100 off, and hopefully make a happy customer. He comes and picks the unit up, thrilled with our service, and our salesman even goes out to his house to help him with the hook-up and discuss speaker upgrades.

A few days later, he calls the store. Newegg.com is offering the same receiver plus a free iPod Touch. Can we give him an iPod Touch? Sorry, that just isn’t an offer we can extend to you, we don’t even sell the iPod Touch, sorry.

Then, about a week later, I get a phone call. On a Sunday night. At home. Just before 9:00 p.m. He has looked my name up in the phone book and decided to call me. Even though he is thrilled with his new receiver and our prompt service and support, he wants to discuss the fact that Newegg is now offering a new promotion. If he purchases the unit from them, they will give him a $500 gift card. What can we do? In other words, he wants us to do an after-the-sale-price match, which is a totally new – and unwelcome – request.

Admittedly, I am a bit flummoxed. First, our home phone almost never rings, and in the 13 years I’ve been doing this, this is the second time a customer has called me at home. Second, I’m totally out of my element. I’m at home. And it’s Sunday night. Finally, I’m drinking a glass of wine and getting ready to put my four-year-old to bed, so discussing a discount on a two-week old receiver is not something that was immediately on my radar. I explain – in the nicest tone I can muster – that I’m not really able to do anything about it while at home – on a Sunday night – but that I’ll be happy to discuss it tomorrow when I’m back in the store.

So, the evening now soured, I jump on my laptop hoping to confirm that Newegg won’t be an authorized reseller and that I can just easily blast his request away saying that they aren’t authorized to sell the product, etc. But, turns out they are. So I e-mail my rep and explain the situation and remind him about how protected this line was supposed to be and how right now it is feeling about as protected as a pair of crotchless pants.

The next morning I open the store to find an e-mail waiting for me from the customer with the screen shot showing the offer from Newegg and their stamp of authorized dealer-ness. So, what to do? I can’t offer him $500 in store credit. We didn’t make anywhere near that on selling him the receiver. I can’t just take it back, because after two weeks it is no longer new, no longer returnable, and a product that is a special-order item for us. This isn’t even part of a larger project where I can try and suck it up and offer to make it up to him somewhere else along the way. Also, I don’t really want to establish a precedent of after the fact price adjustments. We aren’t Wal-Mart. And, frankly, we don’t want to BE Wal-Mart.

So I sent him this e-mail:

Mr. XXX:

I'm afraid that in this case, we won't be able to offer you any special pricing accommodations on your new receiver. Occasionally Internet retailers offer deals around the holiday times that we just cannot match as a local business.

We did match the $1,399 price at Amazon.com at the time of your purchase and we really can't match any follow-up promotions that you might find on the Internet following your purchase. If you are unhappy with the receiver, we could take it back, but we would have to charge you a 20-percent restocking fee. At this point, you've had the receiver for two weeks, and we would be unable to sell it again as new or return it to the manufacturer. As we mentioned when you purchased the unit, this is not a piece that we regularly stock and is definitely a special order item.

We do offer far more service and support than you would receive from any Internet retailer, and I know that your salesman has spent quite a bit of time going over different speaker options with you, which is something that we feel is a tremendous value add.

Regards,
John Sciacca


He never responded to my e-mail, which means that he’s probably not thrilled with my decision. Have I lost the prospect of a potential future customer? Perhaps. Do I really want to have a customer that is going to call me at home on a Sunday night to discuss a lower price he found on the Internet? Perhaps not.


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