All together, raise your right hand and repeat after me. "Price is King. I will accept the basic truth that the vast majority of consumers simply want to find the best price."
And as I write I can hear the rumblings. "Unfair!" you say, as you anticipate me painting every consumer with the same brush, "Not all of us are cheap." I'm not saying every single consumer will purchase the cheapest possible product. What I am saying is that we all want the best value for our hard earned dollar. When I'm on the road, I don't stay in the cheapest hotel. I don't even stay in the cheapest room in a nice hotel. But once I pick the hotel and the room I want, I do want to make sure I'm getting the best possible price for that room. And I'm pretty sure that if I'm in a room with 100 people, 99 of them will want the same thing. Yes, service is important. Yes, selection is important. Yes, guarantees are important. But in the mind of the consumer, price is paramount.

Bargain Hunting by Browsing

The Internet should be the perfect place for a guy like me to hunt up a bargain or two. I hate haggling. Here's my typical buying pattern. I research the heck out of my purchase. By the time I'm ready to buy, I know exactly what I want, how it ranks in consumer reports and what the expected price range should be. If I happen across a bargain price on my intended product, I'll know it. When I start to begin the purchasing process, I like to comparison shop quickly and quietly. I'll avoid a sales person like the plague. Finally, when I think I've found the very best price I can, I'll approach a sales person, but only because it's the only way I can actually make the purchase.

The online shopping experience fits me to a tee. It's the perfect place to comparison shop. The process of shopping is reduced to its bare essentials. I don't have to listen to a sales person telling me why I need this particular product to enhance my life experience. I compare features and price. I make my decision. I buy.

The problem comes in finding that elusive best price. Let me give you two examples of personal frustration that I have recently run into online.

The Price is Right?

Recently, I flew from Vancouver to Los Angeles. I always try to find the best airfares online. I used an online travel service to search for the lowest fare and was told that a Canadian airline offered the lowest price. I tried to book but the service wouldn't let me because it decided there wasn't enough time at one of the airports to make my connection. My slight frustration at this turned into building rage when I found out that the service put the charges through for the ticket on my credit card not once but 4 times (once for each time I tried, plus once when the marginally helpful customer service rep from the service tried). After a couple of phone calls, I was told that I could book the next cheapest fare, which just happened to be three times the price. Thanks but no thanks.

I went to the website of another airline and checked their fares. I found a web special that was slightly higher than the first fare I found. This special wasn't shown on the travel service's site, despite the fact that it says it finds the lowest published fares for all participating airlines. I know there's probably a very valid technical reason why I didn't get the information I was looking for, but as the consumer, I really don't care. All I wanted to do is find the best price.

Pick a Car, Any Car

My next experience in Internet Roulette came when I tried to reserve a rental car. Again, I used the travel service to find the best rental rate. I was just about to go with it's suggestion, when, having learned from my previous experience, I decided to go right to the rental company's site and see what rate it gave me. Guess what? I saved almost 40 dollars in rental charges over 3 days by doing this. I should say that on previous occasions, the situation has been reversed and the service gave me a much better rate than the corporate site.

Just Give Me the Best Price

And therein lies the crux of the problem. Online consumers can't trust that they're getting the absolute best price. We hesitate to plug in those credit card numbers because we think there might be a better deal just around the next digital corner.

In the last NetProfit, we outlined the reasons why online e-tailers should be able to pass along prices significantly better than bricks and mortar retailers. Today, we'll explore two strategies for the e-tailer who is prepared to do this.

Don't Hide the Deals

All too many online businesses are reluctant to put their best prices out there for all to see. A few years ago we built a site for a hotel. We tried to talk the management of the hotel into using their website to clear out unused inventory through last minute web specials, similar to the strategy employed very successfully by the airlines. The manager insisted on only putting the rack rate (highest possible rate) on the site, hoping that "people wouldn't know any better and would book at this rate." I wish this was a one of a kind occurrence, but it's not. We've seen it repeated time and again in all types of industries. And it's this attitude that's built the web's reputation as an unreliable place to shop.

If the web allows you to offer exception bargains or blow out inventory at drastically reduced prices, don't make visitors search all around to find those prices. Look at them as loss leaders that will drive traffic to your site. Put them front and center on your home page.

Reward Your Regular Customers

This next marketing mistake is not only made online. All types of merchants, e-tailers and traditional retailers make it every day. If you are offering an exceptional deal, make sure you offer it first to your best customers. All too often, we try to lure new customers in with the big sale prices, forgetting to reward the people that keep our business going.

If you can pass along a great deal, send a quick e-mail out to select members of your customer base. Here's an example. With the airline I mentioned before, I often fly between the same two destinations. Obviously, the airline keeps records from which this information could be mined relatively easily. If they are having a web special between these cities, it would be child's play to fire me off an e-mail letting me know about it. The e-mail could include a quick booking link, allowing me to reserve my seat with a couple of clicks of my mouse. It's this type of proactive marketing that would build my loyalty to this airline and keep my business. Websites make it easier than ever, yet very few online merchants are taking advantage of this.

Price Will Drive E-Commerce

The single biggest thing that will drive e-commerce forward will be when the inherent efficiencies of selling online are passed along to the end consumer in the form of lower prices. I've put forward two suggestions on how to do this. There are several others. But there is one underlying fundamental truth that governs commerce. If you can find a way to connect the consumer with the best value, you'll win...big time! Sam Walton was proof of that.

P.S.

By the way, speaking of Sam Walton, guess which mega-retailer is now seriously promoting their online location? If anyone has the vision and infrastructure to capitalize on the promise of e-commerce, it's Wal-Mart.