Pricing Lessons from Shopping at Best Buy Mobile
Yesterday while walking through a mall I saw a Best Buy Mobile store for the very first time. Since I enjoy electronics, Best Buy, and business strategies, I walked in to have a look around.The first guy who greeted me asked if he could help. To which I replied, "sure. I've never seen a Best Buy Mobile store before. How is this different from a normal Best Buy store?" The clerk responded with something like, "We only carry mobile products, and we have great prices. You won't find better prices in the mall. We bundle in all of the rebates so you don't have to submit them." He talked about price some more, but I don't remember what else he said. Being a pricing guy, I was pretty surprised that Best Buy would build a store focused solely on price, so I asked him the question directly, with sincere curiosity. "So are you telling me that the reason for Best Buy Mobile is you have great prices?" He replied, "No, but everyone likes good prices." At this point the other clerk, obviously annoyed with my question, chimed in with a snooty attitude. "No, we are the only place in the mall that carries all 4 major mobile companies, Sprint, Verizon, AT&T and T-Mobile." Not wanting to get anyone riled up, I said "Thank you", walked around the store silently a bit longer and then left. What happened? Clerk #1 obviously thinks price is their most important feature. He led with it and he stuck with it. However, in the world of Value Based Pricing, our salespeople must lead with value. What are the benefits and features of the store or product? It is easy to think price is the most important attribute, but you can't get the best price until you sell the value. Lesson #1 - Sell Value First. You can't get the best price until you sell the value. Clerk #2 was obviously annoyed with my questions. His attitude certainly let me know I wasn't really wanted there. However misguided the first clerk was, he was sincerely trying to answer my questions and I appreciated that. The second clerk just made me want to leave and never return. When customers don't walk in your store, no price exists that can win their business. Lesson #2 - Don't destroy value. Every customer touch point either creates or destroys value. Pricing cannot easily compensate for destroyed value. In the end, I will go back to a Best Buy Mobile store because I realize these guys aren't highly trained professional salespeople. However, what is your sales force doing? Are they leading with price? Are they creating or destroying value?
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