We’ve all seen the commercials and heard the radio advertisements. “We will match any price! Just bring in your receipt.” Being the lowest price is fine and dandy, but there is a risk involved in lowering the cost of your product based on your competition. I know what you’re thinking, “What risk? As long as my customers end up at my shop, I will continue to get the orders. I win!”
And, you’re right. By price matching, you will likely see a huge increase in volume. But is this the kind of business you are trying to earn? Let’s run through a hypothetical situation:
Eddie owns Big City Tires. He has the guaranteed lowest pricing in town. Each morning he has customers lined up outside his door, waiting to buy tires for their cars and trucks. He sells 500 tires per week with a profit of $35 per unit.
Jamie owns a small tire store down the street called Tire Depot. She doesn’t sell anywhere near as many tires as Eddie, but through personalized customer service and relationship-based sales, she sells 100 tires per week with a profit of $205 per unit. Her customers are loyal to her and gladly pay the extra money for her advice.
Which tire store would you rather own? It is clear that Big City Tires dominates the market in the area, since they sell 5 times as many tires as Tire Depot. But is the goal of owning a business to sell as much as you possibly can, or to sell each unit for the highest possible profit? Jamie at Tire Depot actually spends less time processing orders and more time counting her money.
Lesson: Not all business is necessarily the kind of business you need.
When you qualify customers, ask yourself these 3 questions:
1. Will this sale improve my company long term?
2. Is this transaction worth extra time and resources, or are am I simply breaking even?
3. Is the customer choosing my business for the right reasons, and will they refer future prospects because of it?
Get away from the price-matching trap and use your time wisely. Keep in mind that 80% of your business comes from the top 20% of your customers – so focus on building the accounts that are putting money in your pocket. The quality of your customers has a direct impact on the success of your business.

Have you fallen into the price-matching trap? Join the conversation with Anthony below or email him directly. You can also read more from him!