Price and Customer Wants and Needs: Where Does It Fit?
If you read the survey research on customer desires, you’ll find that often, price is towards the middle of bottom of the list. That is, when asked, via surveys, consumers suggest that customer service is more important.
And for a very few, that’s true. And, in some niches, price becomes less relevant. The wealthy folks that spend $100 to $200 a person at a high end dining establishment aren’t doing penny by penny cost comparisons, but they are exceedingly demanding in terms of quality and service.
The Rest of Us, Not So Much
The stark reality is that for many things, price or at least the perception of low prices is a huge determinant of where people shop.
Consider Walmart. Did it grow to dominate the marketplace by offering great service, or because it became known for having the best prices.
Consider gas stations: When was the last time you saw lineups at the cheapest gas stations during a price war? People are willing to spend 20 minutes in line to save a few bucks on their fill ups. Go figure.
Costco is a success because of prices, and yes, it does couple price with great service, but still. Who would go to what is essentially a pretty ugly warehouse where you have to PAY them for the honor of shopping there?
We could go on and on about the importance of competing on price, but here’s the thing.
While there are niches where price isn’t important, the vast majority of people will gravitate to the lowest prices.
And in case you are wondering, the other top factor that influences consumer decisions is….
