Is Getting the Best Price Really Worth It?

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At a recent dinner party I happened to mention shopping at a local independent retail store. My friend Sean angrily remarked he never shopped there.

I was surprised Save a few pennies but lose a customerbecause Sean is very loyal to the local business community. He makes a point of shopping in town, even if going to the city or buying online will save him a few bucks. So I asked him to explain.

It goes back to his career. You see, Sean sells cell phones. He’s an independent sales person and works out of his home, rather than a retail location.

His main focus is larger companies that need multiple phones for their employees. However, he also sells to small businesses that only need one or two phones.

Sean gives great customer service

What makes buying a phone from him different is the level of customer service. Sean goes above and beyond for his customers. He helps you decide which phone and which plan is best for you. He’ll deliver the phone to you personally. And if you run into problems, he cuts through the red tape of the corporation and solves it for you.

But there is much more to being a customer of Sean’s. Sean is extremely loyal to his customers. If you buy a cell phone from him, he works hard to help your business succeed. He’ll recommend you to his vast network of contacts. He’ll frequent your business himself. In fact, even if he can save money by going to your competitor, if you’re his customer and they’re not, he’ll buy from you. Every time.

So why was he so mad at this local business?

You see, this local business used to be a customer of his.  When his cell phone contract came up, he decided to shop around. This retailer found a cell phone that was a better deal than Sean’s cell phones so he switched.

Seems reasonable; get a better deal, switch suppliers.

So why was Sean so mad?

The guy saved peanuts

First of all, this new phone plan is $3 per month cheaper than Sean’s cell phones. That means this guy is only saving $36 a year.

Compare that to the $150 Sean recently spent in this man’s store. And he probably spent three times that amount annually. That’s a lot of money compared to $36 per year.

He didn’t shop locally

Second, the cell phone provider this guy switched to was selling to him out of head office in Toronto, not even a local competitor. If it had been someone local, Sean could have lived with that. But not shopping locally is a big sin in Sean’s book.

No loyalty to customers

Finally, there’s fair play. By shopping around himself, Sean could buy products much cheaper than from this local retailer. In fact, this guy’s not even the cheapest place in town, never mind compared to the city or online. But Sean purchased from him because he got good customer service from the staff. But mainly, he shopped there because he’s loyal to his customers. But this guy didn’t show the same level of loyalty.

So, the upshot is, this guy has saved himself $36 per year. But he’s lost $500 per year in sales. And I expect I’m not the first person Sean’s told this story to, and I won’t be the last. I know for myself, I feel slightly less inclined to shop at this retailer’s store. I just don’t quite have the same warm fuzzy feeling that I used to.

So, at the end of the day, was it worth it for this guy to switch suppliers? I suspect not.

Andrea J. Stenberg

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