Thought I'd pull this out of a thread elsewhere and drop it here to see if it can generate some "behind the scenes" discussion. (It's on my website as well http://www.aquismarketing.com/new-blog-1/)
For all the talk of the rise of the internet retailer - and the contempt with which many divers regard any bricks & mortardive shop owner (or boat operator, gear manufacturer, resort owner, etc) who wants to be able to keep their doors open and feed their family - I don't think any diver WANTS their local dive shop (LDS) to close up shop. Quite the contrary, in fact. Most people would love their LDS to run a business in a way that allows their shop - and diving overall - to flourish. Doing so benefits both the shop and the the diver alike. (And not simply by ensuring access to tank fills.)
However - to buck conventional wisdom - that doesn't mean that the LDS needs to cut prices in order to keep customers walking through the door rather than going online. They simply need to run their business in a way that causes divers to WANT to spend money in their shop... rather than someplace else.
Marketing is about convincing people to make irrational financial decisions
Customers willingly make commercial decisions that are not in their best economic self-interests all the time. Think about it. Why do people willingly buy a beer in a bar...
...when they know full-well that they can purchase the exact same beer for 66 cents, right across the street?
In a world where is seemingly a liquor store on every street corner, purchasing beer in a bar makes no rational sense whatsoever. Yet plenty of the same people who have no problem laying out $3.00 for a 66-cent beer will go out of their way to order a bolt-snap online in order to save a dollar... all the while excoriating the LDS owner for trying to "take advantage of divers" or "rip divers off" by charging a higher price.
What can be done short of lowering prices?
A retail transaction is a simple form of economic equilibrium: a customer gives the shop owner a certain amount of money in exchange for something that they perceive to be of equivalent value. When the customer doesn't perceive the potential value received to be commensurate with the amount of money requested... no transaction will occur. If an LDS owner - or any business person - faces that situation with any regularity, there are two remedies available:
So if you don't want to lower your prices (who does?) you need to find ways to increase value. And, yes, many LDS owners will tout the ability for the customer to try gear in the pool, compare items side-by-side, expertise, etc as value that they provide that the online retailer doesn't. However... those are RATIONAL things. Can you imagine a bar trying to justify charging $3.00 for a bottle of Bud based on the fact that the bartender has bottle-opening expertise? Or that the customer has the ability to try a sip of several draft beers before committing to spending $2.75 for a whole glass of the one they prefer?
So, what ELSE we can provide customers that will better allow them to make the irrational financial decision to give a dive shop their money... with a smile on their face?
For all the talk of the rise of the internet retailer - and the contempt with which many divers regard any bricks & mortardive shop owner (or boat operator, gear manufacturer, resort owner, etc) who wants to be able to keep their doors open and feed their family - I don't think any diver WANTS their local dive shop (LDS) to close up shop. Quite the contrary, in fact. Most people would love their LDS to run a business in a way that allows their shop - and diving overall - to flourish. Doing so benefits both the shop and the the diver alike. (And not simply by ensuring access to tank fills.)
However - to buck conventional wisdom - that doesn't mean that the LDS needs to cut prices in order to keep customers walking through the door rather than going online. They simply need to run their business in a way that causes divers to WANT to spend money in their shop... rather than someplace else.
Marketing is about convincing people to make irrational financial decisions
Customers willingly make commercial decisions that are not in their best economic self-interests all the time. Think about it. Why do people willingly buy a beer in a bar...
...when they know full-well that they can purchase the exact same beer for 66 cents, right across the street?
In a world where is seemingly a liquor store on every street corner, purchasing beer in a bar makes no rational sense whatsoever. Yet plenty of the same people who have no problem laying out $3.00 for a 66-cent beer will go out of their way to order a bolt-snap online in order to save a dollar... all the while excoriating the LDS owner for trying to "take advantage of divers" or "rip divers off" by charging a higher price.
What can be done short of lowering prices?
A retail transaction is a simple form of economic equilibrium: a customer gives the shop owner a certain amount of money in exchange for something that they perceive to be of equivalent value. When the customer doesn't perceive the potential value received to be commensurate with the amount of money requested... no transaction will occur. If an LDS owner - or any business person - faces that situation with any regularity, there are two remedies available:
- Lower The Price Requested
- Increase The Value Offered
So if you don't want to lower your prices (who does?) you need to find ways to increase value. And, yes, many LDS owners will tout the ability for the customer to try gear in the pool, compare items side-by-side, expertise, etc as value that they provide that the online retailer doesn't. However... those are RATIONAL things. Can you imagine a bar trying to justify charging $3.00 for a bottle of Bud based on the fact that the bartender has bottle-opening expertise? Or that the customer has the ability to try a sip of several draft beers before committing to spending $2.75 for a whole glass of the one they prefer?
So, what ELSE we can provide customers that will better allow them to make the irrational financial decision to give a dive shop their money... with a smile on their face?
