Part 3: Yet More Blunders

Blunder #5
You’re advertising your price list.

Advertising is a terrible thing to waste.

Let’s say you spend a couple grand for newspaper space, a radio spot, a billboard or a blimp and get in return…bupkis. In this case, you might have been better off simply leaving a 50-inch plasma out on the sidewalk for someone to carry away. (When their friends ask them where they got their great-looking TV, the new owner will almost certainly mention your store’s name. And we all know word-of-mouth is the very best form of advertising. Right?)

A proven money-wasting strategy is to “advertise your price list.” In this case, you create an ad that provides a model number and selling price, unencumbered by filigree such as reasons to buy from you. The consumer can simply check your price against your competitors and make his or her buying decision. Your competitors particularly like it when you advertise in this fashion, as it makes it easy for them to determine their own selling prices (e.g. lower than yours). This form of advertising seems particularly popular with camera stores, whose (print ads, at least) often appear indistinguishable from one another, except for the logo at the bottom.

Now, it should be acknowledged that sometimes this price-list technique can work in your favor. You may indeed have the lowest price out there and will therefore have a better chance of a shopper choosing your store. However, customers for whom “lowest price” is the only criteria in choosing a dealer are not commonly considered a good foundation for long-term profitability.

My recommendation? Reserve this form of advertising exclusively to “blow out” events where the goal is liquidity, not direct profit. Use it to advertise customer returns, discontinued models, demos, exchanges, that sort of thing. But–and this is really important–price this detritus at the very lowest prices you can stomach. Preferably prices lower than even your competitors can stomach. Do the quick hit–turn some boxes into cash–and then get back to trying to sell the profitable stuff.