Business

What to do if you don’t want to compete on price

How would you like to have raving fans, who'll drive hundreds of
miles to your stores to pay higher prices than your competitors charge?

REI
has stores like that and I love to buy from them. They have great gear
and knowledgeable staff (who actually use the gear). But they don't
always have the lowest prices. In spite of that I go out of my way to
buy from them rather than their competition.

Why?

Here's why:

IMG_0874

That's right. A 100% satisfaction guarantee, no questions asked, for as long as you own the product.

I
have a friend who went into an REI store with a tent he'd purchased
over a decade ago. He wanted to order a replacement pole for one that
he'd lost. They told him they couldn't get one exactly the right size.
So they gave him a brand new (and better) tent.

Did they lose
money on that transaction? Absolutely. But, they understand the
lifetime value of a customer. And they understand that outdoor lovers
talk.

The cost of a tent was a small price to pay for the number
of people who've heard that story since it happened. REI's customers
think they'd be crazy to take the risk of buying from someone else.

What's the story your customers are telling themselves?

Standard

3 thoughts on “What to do if you don’t want to compete on price

  1. REI has managed a real trick: getting big an maintaining remarkable. The no questions asked customer service policy cuts trough the expected bureaucratic nonsense and instead gets to a solution. They get the audience because they are the audience. The kind of executive authority rated in a clerk to defy hierarchy and replace a tent, or in another acquaintances story, a Teva he actually shoplifted as a delinquent youth, builds on a sort of outdoor code: “brah, it’s cool, we will fix it.” that’s worth driving miles for… Just as something sacred and wild like The Black Canyon or any wilderness area is worth the extra work.
    When a giant organization (and realm, REI is) trust their giant tribe, the permission asset is almost limitless. Frankly, REI doesn’t have a like competitor, not because others aren’t trying to dethrone them; it’s because others don’t have rival tribes.

  2. Hi Jon – Is the guarantee really why you pay more and go out of your way to buy from REI? I’m not saying it hurts, but is that all a company needs to do to win your loyalty?
    I suspect other aspects of REI are as important or nearly as important to you as its return policy, but may be more subtle and tougher to articulate.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s