We lost a sale to a competitor this week when the prospect purchased a hardware and software system for several thousand dollars less than our cost price – even after allowing for cheap no name brand hardware coma red to our HP brand hardware.
We are in business for the long haul. Buying new clients at a loss does not make sense to us nor is it respectful to our customers.
The competitor selling hardware and software for well below the cost of the hardware alone, unless it’s second hand gear, will pay the price of this strategy in the short to medium term. The customer will, over time, realise that the total cost of ownership is higher thanks to often higher support fees.
Retailers do eventually discover that what is very cheap today is not so cheap next year and the year after. As we note here with regularity, the total cost of ownership of a computer system must weigh heavily in your consideration just as the financial and operational value you derive in using the software.
Market leadership comes from delivering bankable benefits to retailers and doing this for a fair price and with a viable total cost of ownership.
In this situation where to match the price of a competitor would been thousands of dollars lost on a sale we wish the prospect all the best and leave our details for future contact.
Footnote: it will be interesting to see which competitors pick up on this blog post. We have a couple in one of the marketplaces in which we do business who seem to think that much of what we write here is about them. Most times they get it wrong.