I’ve been listening to the Harvard Business Review’s podcast for about six or seven months now and I’m constantly amazed at the depth of material that they offer, for free, to managers and businesspeople about how to suck every bit of opportunity out of each and every opportunity.  Today’s podcast is about decision making, but more than that the example that the guest is discussing how Best Buy has figured out its market segments and is operating each store as an entity targeted to attack your wallet in an attempt to get the most out of it possible.  That is to say that they know that most of their market is comprised of people of certain ethnic, gender and income specifics and they’re going to carry products that are most likely to appeal to people within those constraints.  They’re going to attempt to get employees to be able to manipulate customers to spend more money on bigger ticket items or more items by volume - but either way, they want more of your money.  It’s a battle and the stores are winning in most consumers’ lives.

However, opportunities exist that allow you to maximize your battle strategy.  The first step is to be aware of the enemy’s strategy.  There are resources out there that will tell you how employees are trained, how store policies are set up and what things you need to do to combat those.  The second step is to have a shopping list - even for electronics, cars, or any other purchase.  The shopping list means you will need to prepare ahead and know exactly what you want.  Third is to develop a strategy for attacking their revenue.  In the case of buying consumer electronics more than one place I’ve read has said that you want to negotiate on the price of the items with their extended warranty plan!

I know this sounds counter-intuitive, but often they can’t negotiate the price of that extended warranty plan but they can give you a deeper discount on the item or items.  The price of many of the cables is much higher than it could be, but that is where they want to make up some of their profit.  Be willing to negotiate with the extended warranty plan, get the price you want, and then back out of the warranty plan at the register.  They’ve already committed to the deal and so you can negotiate there.  You have the leverage.

Stores often will try to woo in customers with a ‘loss leader’ and then hope to make up the difference in added sales due to impulse buys or other higher margin items.  This is a battle strategy that you have to think about ahead of time.  Using a price book you can know that you will save a lot on many of your staple items at a different store and avoid giving away the bank nickle-by-nickle.

Remember: the battle rages on for your dollar, don’t give the victory away - think, plan, act, and be victorious!

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This entry was posted on Thursday, October 4th, 2007 at 10:38 am and is filed under Savings Opportunities, Tips'n'Tricks. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.