Price Isn't Everything

The web saves businesses money, pure and simple. Where companies save in distribution costs and overhead, they can pass the savings on to consumers. Bingo! Lower prices! But smaller businesses often can't compete with the big discount outlets. Smaller businesses aren't likely to be buying from wholesalers at volume discounts. And they aren't generally privy to exclusive deals with big manufacturers. Does that mean smaller online businesses are doomed? After all, it's so easy to comparison shop online that customers can sniff out the lowest price. Why would customers patronize your business when other etailers are selling products at a better price? Because customers don't just care about prices, says Josh Goldman of mySimon.com. His comparison shopping service was founded with the mission of giving customers complete information about online merchants. Not just on prices, but information on customer service and support, return policies and more. He says shopping bots can be a business' friend, not a threat.

Shopping Bots - Friend, not Foe

Early shopping bots were created to help customers find the best prices. The bots were programs that queried various manufacturers and gave customers information on prices. That scared a lot of smaller web retail outposts. "The shopping bots were seen as something that would force prices down, would threaten margins and threaten the brand of the individual retailers: If there were a place to go that said you can get that pair of Dockers and that piece of electronics at this price at this retailer or that price at that retailer, it would force the focus on price. If price were the only thing you could compare, that's what consumers would pay attention to," Goldman says. But where others saw a threat, he saw opportunity. "We felt that if it were done properly, if it really featured merchant brands and explained not only price, but also the real differences between merchants, then comparison shopping could be a very powerful tool for both consumers and for the merchants," Goldman says.

If You Can't Give Savings, Give Service

Sure customers like low prices. But they value other things too, says Goldman. "We're seeing less than 20% of our shoppers who choose to sort from lowest price to highest price," he says. "Some categories are more price sensitive than others. But we're constantly surprised by the number of people who choose to go to a brand that they trust or simply the one that provides them a fair price for the purchase and gives them something else: security, support, whatever it is that's important to them and that decision." So maybe you can't provide a lower price than the big guys. You can give good service to your customers instead. "In any given category if you have a hundred people selling it, there's only one who is the lowest priced merchant. There are many things that a business can do to establish value in other ways," Goldman says. "Support is now becoming a critical thing to focus on, technical support or customer support, in order to achieve differentiation." Offer something different to your customers. If you can't be the outlet with the lowest price, be the one that customers trust and return to.

Communicate Your Strong Points to Customers

Now that you've vowed to woo your customers with service, you have to let them know about it. Make your policies easy-to-find and obvious. "In a service like ours it's critical to make sure that the shopping bot lists your site as having all of the features that it has," he says. mySimon.com offers a customized page that lets consumers compare merchant features like 24-hour support, response time to queries, return policies and the like. "You have to make sure that your partners communicate that information. Our partner merchants are out to show the price, as well as say, 'Ours may not be the lowest, but did you know we offer 24- hour support and 3-hour guaranteed response time on e-mails during business hours, or that you can pick up the phone and talk to a real live person whenever you want with the toll free number?'" he says. Prices are important to consumers - but then again, so is service. If you can't deliver the lowest prices - and these days, who can but the big boy outlets? - you can deliver gold-standard service. When customers find out about your stellar service, you'll see that many care about more than just saving money.