Price matching might sound like the ultimate pricing strategy that your business should include after you hear about price match Walmart policy. It is true that many consumers put the price as their primary factor to consider when they purchase an item whether it is online or in-store.
29% of shoppers have admitted they want price matching from online retailers and what you need to consider when you are thinking about price match policy. Then there are 38% of people who are willing to shop between many stores to find the lowest prices. With these statistics, you might be inclined to be interested in a price match. But is it the right one for you?
Factors to consider before offering a price match
Price matching can improve customer loyalty, drive sales, and can even help with repeat sales. However, regardless of the size of your business, you need to consider the following before you offer a price match policy to your customers.
Margins
Can you really afford to make your margins slimmer? There is nothing wrong with analyzing your competitor’s prices and then coming up with a pricing strategy. However, you need to clearly define your margins and whether your business can afford the loss of margins. Remember, you cannot control how much your competitor is pricing their products at, but you can control your margins. Think about whether price matching can be part of your business’s future too.
Differentiator
When you match your price with the competitor then you are competing at the same level. If both of you are offering the same products at the same price, then would a customer be more willing to buy from you? Or will they see you are equal? You can add in some differentiators to help customers see why they should choose you over your competitor. In the case of price match Walmart policy, Walmart is known for its super low prices and so it doesn’t have much to lose.
Brand image
You want to think about your business first and foremost and then think about how you can offer value to your customers. If the margins are too thin and you think you will go out of business if you offer price matching then you should avoid it. Ultimately, you want to create a balance between your customers and your business. You want to give your customers a great deal but you want your business to flourish as well.
Define in depth
When you plan to offer a price match policy, you need to define it in detail. Carefully thinking about the limitations and restrictions along with the eligibility of price matching is crucial to a business. If you look at price match Walmart policy then you will notice they have defined their policies about in-store and online price match policies in great detail. When you create a policy in-depth, it protects you and your customer.
Testing is crucial
You shouldn’t dive right into it but you should test first. It is always a safe way to start and protects your business from irreparable damage in the long run. Let us say you have thought about offering a price match policy like the price match Walmart policy but you are not sure it will work. Try it first and then measure how well you did. Depending on that, you can then choose whether it is a practical option for your business or not.
Is it right for you?
The price match Walmart policy might be working brilliantly for Walmart but that doesn’t mean you will get the same results. Walmart has been in business for more than 55 years and it has managed to cut costs so price matching doesn’t hurt its margins by much. However, for a new business that has just launched, price matching can be detrimental. That being said, price matching is not for every business out there and businesses need to consider the pros and cons before choosing whether to offer price matching policy. You want to spend some time analyzing your business specifics such as size, industry, and market outlook.
An important piece of advice is that although many people prefer price as their number one factor for buying a product, they take a look at other factors too. There are many instances where customers are willing to pay more. This includes if you offer an easier to buy option, you have good shipping options, you provide excellent customer service, the product requires less maintenance, and the price difference is a small one. Price matching, like any strategy, needs to be planned out before implementation.