Mark A. Santillo, Creative Director of Active Imagineering, read Scott Thorne's recent column regarding price versus value (see "Rolling for Initiative--Price vs. Value") and has a few suggestions to add to the subject.

In Scott Thorne's recent column on price vs. value, he frames the question but does not provide possible solutions.  Here are a few suggestions, reprinted from my column in the GGIC last year:

“Active Engagement” – Small Business Marketing Strategies from Active Imagineering (Copyright © 2010 Mark A. Santillo)

Distinction is the Better Part of Value

Value is more cogent than price.  Or to put it more expansively, market research shows that consumers will gladly pay more for something they believe offers superior value.  The lesson here for retailers is that it’s not necessary to compete on price -- i.e. to discount -- in order to claim customers’ loyalty IF you’re offering value instead.  Sales are a useful way to exorcise toxic inventory or to secure a temporary financial advantage but they don’t do much to secure customer loyalty.  For that you need to focus on providing value.

Value comes in many forms.  Exemplary customer is a form of value, and one that’s greatly appreciated, especially as it’s seen so rarely these days.  I’d like to provide a few more tangible suggestions, however, that you can implement right away!

The Value-Added Sale: Rather than offer a percentage discount that only takes dollars from your register, better to offer an additional bonus with purchase.  For example, you might offer an entry-level module at 1/2-price with every hardbound core system book sold.  Or three miniatures from a limited selection.  Always choose a bonus item for which the profit margin is less than that on the primary product.  Giving the customer some choice also contributes to their satisfaction -- we all like choices.  A sub-set of the Value-Added Sale is the “bundle sale” -- offering slightly better prices on a combined purchase (Core Book + Module + GM Screen + Dice Set, for example).  This technique has the ancillary benefit of increasing sales volume to achieve higher distributor discounts.

Frequent Purchase Rewards: Just as credit cards offer “reward points” for accumulating purchases, you can offer a similar benefit.  Customers would earn store credit after a pre-set number of purchases or total expenditure is reached.  Make sure the amount required is more than sufficient to cover profits lost to the credit.  Don’t place any restrictions on the use of this credit either or you risk harming your credibility.  Expect that sooner or later someone will want to use store credit towards the “really cool thing.”  By that time, though, you’ll have gotten their money’s worth!

Surprise Rewards:  It’s been scientifically proven that “intermittent reinforcement” is the most powerful behavioral conditioner.  If your customers have a reasonable expectation that they might earn a surprise reward with their next purchase, it will keep them coming back.  It’s vital that you give out these surprises with a frequency sufficient to encourage continued engagement.  These “variable ratio schedules” deliver reward after a random number of purchases (based upon a predetermined average).  You may have to experiment a bit to find the right ratio for your customer population.  The reward should be related to the purchase for which it was received.  There’s no point in giving a metal miniature set to someone with a paint allergy; unwanted gifts are just that.

Special Acknowledgment -- Everyone likes to feel special once in a while, whether it’s on their birthday or a significant anniversary, etc.  Learn the significant dates in your customers’ lives and surprise them with a small gift on those dates.  These items don’t need to break the bank; a little goes a long way.  What matters most is that you recognize them at all!  Institute a “Customer of the Month” program and ask your employees to lavish attention on those people whenever they walk in during that month, give them free sodas, put up their picture, etc.
 
Exclusive Previews -- Do you know the “next hot thing” to hit the table?  Invite customers to try out these games at a “private showing” and play with them.  Buy them a pizza and ask for their “personal feedback.”  If they like the products ask if they would be willing to demo them at your store, then solicit rewards from the publisher for them.  These invitations should have an air of exclusivity, something to be sought after by your customers as ardently as a rare foil card, the ultimate in “gamer geek cred.”
 
I hope that you can see how, in each example I’ve given, the value of value boils down to one clear message: “I appreciate your business.” You’re welcome!
 
The opinions expressed in this article are solely those of the writer, and do not necessarily reflect the views of the editorial staff of ICv2.com.