How to Beat Amazon and eBay and Keep the Best Customers for Yourself

December 23, 2011  |   San Diego Bookkeeping   |     |   Comments Off on How to Beat Amazon and eBay and Keep the Best Customers for Yourself

At times it may get discouraging to be a small retail business owner because you feel like the world is against you. You’ve got big competitors with deep pockets trying to lure away your business from all sides and willing to take prices and margins you simply can’t match.

I can understand the frustration but at the same time we do enough bookkeeping to know that there are plenty of retailers still doing just fine out there. The trick is to take advantage of your strengths and cultivate a real relationship with your best customers- something the big discounters and online guys will never be able to do.

And, here’s another idea. I hadn’t thought of it before but it makes perfect sense if you think about it. Actively offer to help your competition to your worst customers! Read the article below for the details and let me know what you think- sounds like a good plan to me!

Amazon has an app to lure customers out of your stores. EBay’s offering incentives to shop online. It’s time to fight back — with a counter-intuitive strategy.

Last weekend, Amazon paid shoppers to scan prices in brick-and-mortar stores with the company’s mobile app and then buy online with a discount of up to $5. This weekend brings the flipside: eBay provides a $10 store voucher for Toys “R” Us, Dick’s Sporting Goods, or Aeropostale if consumers spend $100 online using PayPal at the same company’s website.

Just remember that both of the giants have missed a lesson from a famous Beatles’ song: Can’t Buy Me Love.

A happy core clientele is the basis of a good business. You have already invested in getting them into your door (physical or virtual). The longer they do business with you, the more profitable they are. Plus, there’s a pleasure in seeing the regulars. These are the people you want to attract as customers.

Not all customers are good. There is another type: needy, opportunistic, always looking for another discount or special or promotion before they’ll buy again. Stop the flow of goodies even momentarily and they prowl for the next bargain. Such people are more expensive to do business with because you must acquire them each time, including the effort and cost of telling them about the new opportunity to get more for less. Margins are always low, as a result. You might even find all told that such people cost more than they bring in.

One of the smartest commercial moves you can make is to get such customers to do business with your competitors, no matter what size. That sends your potential headaches and red ink to them while you focus your efforts on retaining the good customers. The customers that Amazon or eBay and its clients pick up are likely only there for the bargain. Tomorrow, they’ll see who can charge less.

When the big boys use such tactics, take an aggressive but counter-intuitive stand. Explicitly welcome the competition. Put up signs telling your customers about the promotion. Become an expert in using these price-matching apps and offer to help customers to use them correctly. That helps put them into a different psychological state where you can communicate and possibly sell to those who are open to a relationship.

Explain that if they’re in such a tight economic squeeze, you’re happy to take a little off the price because, after all, you’re neighbors. Ask them, off-hand, how much it costs them in time and postage to return an item if there’s a problem. Chances are, you’ll nail the sale (you’ve got instant gratification on your side) so you’re not out the business.

In effect, the big company has done the customer acquisition for you. If they stick with the big competitors, you’re better off shipping the bargain fiend off. Plan ahead, and you might even get local media attention for the response.

Remember, when big competitors want to send you lemons, open up a lemonade stand.

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