GC Pricing...your opinion!!!!!!!!!!

[Big Poppa]

This is a question that has been posted by Marty Albertson, CEO Guitar Center.
I am going to embarrass him a little bit and tell you that Marty is our industries current "Man of The Year" and is a rare CEO that started not in business school but behind the counter of SF GC 30 years ago. HE happens to be the most powerful man in the hitory of our industry and handles it with style and grace. I take that he is asking for input here to be the supreme compliment he could pay us Knuckleheads...Please resond......

Here is Marty's question



"Hi All......wanted to get some input.....we (GC) are testing the idea of eliminating negotiation in our stores. We find that most but not all customers find it unpleasant. we have a price guaranty and could offer a loyalty program for frequent shoppers...do you all feel this is a good or bad idea ? Or are there suggestions on your part that you feel would make this work best ......love to hear from any and all...."

 

[Wide'Iwas]

[/QUOTE]"Hi All......wanted to get some input.....we (GC) are testing the idea of eliminating negotiation in our stores. We find that most but not all customers find it unpleasant. we have a price guaranty and could offer a loyalty program for frequent shoppers...do you all feel this is a good or bad idea ? Or are there suggestions on your part that you feel would make this work best ......love to hear from any and all...."[/QUOTE]

negotiation is a big part with a high dollar item due to the local taxes or online shipping.

loyalty program-Theres more to be said about this time frame! points/miles how it would work.

I have made 2 big purchases at gc this year from march to now a boutique amp and a acoustic I negotiated on both with taxes included I payed less then any on line price I could find a few hundred less.

The greeen tag sale coupons work fantastic with the 20% and more I have used those also

My 2 cents what its worth!

kelly

 

[emanon]

Negotiating is part of the game. I would have never bought the only guitar I bought from there if they hadn't come down on the price. I find their used gear prices to be quite high and if they were not willing to negotiate I wouldn't even consider purchasing a guitar or amp there.

 

[leftyguitarblue]

I like it. Haggling prices is a pain in the butt and I'd rather just pay a "loyal"customer lower price. I like to shop at stores like Best Buy that have a reward program that gives back to frequent buyers.

 

[Norrin Radd]

The initial issue I have encountered is that GLP prices can be found matched on the web elsewhere (outside of MF & GC online) and those stores generally offer free shipping and NO TAX, which means I'm saving money by NOT shopping at GC. And yeah, just about everybody reputable online offers at least 30 days for returns. Without the ability to negotiate price, I actually pay more to shop at GC than to do so online. GCs could become THE place to check out the cool gear to your hearts content and then go buy it online for cheaper. Those are just my immediate thoughts.............

 

[the24thfret]

I respect "haggling" in stores because it justifies the price for an instrument to the buyer, as opposed to the seller. Especially on high end instruments, where each is very unique, I think the idea of a set price is not justified by a rewards program. If you find a guitar you like, you buy it for what you think it's worth; I don't know anyone who only buys from one place, even GC. But I respect the Marty for throwing this one out there and asking the people!

 

[kneeoh]

I actually like the idea of the set price with the rewards program. While my experiences @ my local GC have been generally pretty good (brief shout out to Scott - the manager at the Southfield, MI GC), every now and then I've come across a staff member who'll try to screw you during the haggling process by giving you an inflated price and then, trying to make you believe that you can't find what-ever-it-is anywhere else or at a better price. Thankfully I can count on one hand the times this has happened, but with set pricing its guaranteed not to.

 

[Astrofreq]

Personally, I wouldn't care about a loyalty program. I buy from whoever has the cheapest price period. If their set price is cheapest, I'll do it. I don't have time to argue with someone for 30 minutes before buying something. I like to be in/out the door.

 

[whitestrat]

Even though I've never shopped in GC before, I think I can contribute some to this discussion.

Here's me as a businessman.

There are basically 3 kinds of customers in my line of selling high-end luxury watches.

1. Those who buy a product, and trust that you give them a good price when they ask for it ONCE, but don't usually haggle much after. These customers I like because they respect you and your establishment. They know you have to make a living too. I'm actually more inclined to give this customer a no-nonsense price, probably the best I can give and continue having his trust, friendship and support. These are the customers I know who are there purely for the love of the product, and not for the win of the sale. They usually come alone, or with one other friend. These guys I like the most.

2. Those who buy discounts. They don't care much about the resultant price, but take comfort in knowing they got a good deal. These are what I call wolves, and I don't like them. They have no respect for you, the product, or your company, and simply want to grind you down to dust after sucking your juices out and then some. They will come with friends to attempt to intimidate the sales staff. And when that doesn't work, throw ridiculous claims on how low your competitor is giving, then use your price to squeeze a better price from the competitor, which results in damaging the market.

3. These are those who just buy without haggling. Few, and far between, but these guys are true connoiseurs of the product, and pay what they believe it is worth. These guys don't come at all. I go to them with full service. I like them, but they can be demanding in other ways. I'm glad the world has few of these, otherwise I'd be too busy serving these.

For me as a customer, I am most likely No.1 rather than the other 2. (Both petruccirocks02 and Norrin Radd can attest to this) I'd rather just protect myself enough to make sure I'm not getting duped, but give the store a leeway so that I can go back there again if I need anything else. It's better to build trust between yourself and the store.

Many of my not-so-good-customers always complain that we reserve the good stuff for regulars.

Truth is, these guys aren't really good customers, and I always ask them "well, if you want these good products, why don't you just think of why I reward my regulars?"

They'll usually ask "well, then why don't you give this product to me, and I'll be your regular?"

My response is: "How did these regulars become regulars in the first place?"​

They usually have no response after that.

At the end of the day, one needs to know which of these are your customers. Who do you prefer to serve? I'd like to think that we can serve everyone, but that's not possible. You can't please everyone.

So, if I were GC, I'd say, impose a price guarantee (but there must be a mechanism set for failure like refunding the difference), ensure best prices, and remove the haggling.

Loyalty programs are for loyal customers. How many of these do you know of these days? Not many. I don't think it works anymore in today's retail landscape. With the introduction of online selling and fiercer competition, it's a buyer's market now.

 

[brett8388]

GC Suggestions

I've probably bought $40K worth of guitars at GC over the years and am good friends with a few GC managers.

I lthink the relationships I've been able to build as a loyal customer with serious buying power helps GC managers. If you take away their ability to haggle on the price, other music stores will have an edge on GC. I can see maybe a no-negotiating policy on new gear, but on especially used gear, you have to leave the manager with some room to allow them to move products, especially to loyal customers. I think a two tiered policy addressing new and used gear would work best.

While I have the CEO's attention, I'd like to ask if you have a program in place to maintain safety and compliance in your stores for both visitors and employees? I visit GC's regularly in FL, TX, TN, and CA and I'm always amazed by the unsafe acts and unsafe conditions I see in the stores, and as a CSP, I have a duty to mention these issues when I'm in the stores to management. I'm normally met with blank faces when I talk about potential problems.

You have internal (your employees) and external (your customers) exposures and in my opinion your program to control loss could use some help.

Brett Coleman, CSP

 

[colinboy]

id love if you guys came to europe to see the difference in price that we have to pay for our balls!

 

[fogman]

I have yet to experience a GC, but personally I can't stand haggling and negotiating.
To me, it's a pain, and you never know if you did good or not, or if someone else might have done better.
I especially hate doing this when buying a car. We had bought Saturns for a number of years, and it was great! Here's the price. Do you want it or not? It's the same for everybody.

 

[Warthog]

I used to work at a car dealership that used a one price selling strategy. The price on the car was the price you paid. It work very well as this store was always one of the top 15 Chevy stores in the country in sales.

Our customers liked that they got a good price, the first time... yes they might have been able to go to another store and haggled for 3 hours and gotten a little bit of a lowerprice, but they appreciated the integrety of our pricing policy. Most of our loyal customers were people who didn't have the time to shop (we provided devlivery for demonstration and sale) and people who for lack of a better term were average everyday folk who felt comfortable not having to bring along a back up team and always left with a positive sales experience (rare in the auto sales business!)

I feel that it could work in a GC. My guess is the majority of buyers that go to GC are not diehard musicians. They are average players and parents looking for average priced guitars. I would think that they would be intimidated and even unaware of haggling. With the low price, and proof that the price was low (such as advertisment comparisons). People would feel very comfortable with purchasing a guitar. GC also has to review that policy of separating the case from the guitar inorder show the "low" price, while I always enjoyed buying guitars at GC, when this happened, it left me with a very sour taste in my mouth and it felt like a very deceptive business practice aimed at those who didn't know better.

I don't know how if the sales people are paid comission based on the price of the guitar, but if they are comission on just selling a gutiar, whether it is a EBMM BFR or Squire, I am sure they will be more inclined to sell the customer the "right" guitar and not have to use preasure tactics to get more $$$ which would also reduce the sales person's stress....

Personally, I don't like haggling, it is a waste of time. If I go to a store, it is because it is near me. If they have the guitar I want at a good price, I'll buy it and if they continue to provide me with good customer service, I will continue to go to that store first when I am considering a big purchase or for accessories. like many people today, I don't have the time to always hunt out the best price when I want something and when I find a retailer that delivers and saves me time, you bet I'll be back.

You are also competing with online selling where there are sometimes lower prices and no haggling. If you can have the product and the environment that is positive and inviting, folks, especially guitar players will want to go to the store, cause eventhough we will buy a guitar on line, there is nothing like trying out a guitar in a store and totally vibing with it and you think to yourself, "I totally have to have this guitar!" I want to look at the price and smile and take the guitar to the counter and pay for it... I don't want to talk to the sales guy while he goes back and forth to the manager then we settle on a price and then I find out the guitar doesn't come with the case and then we begin the whole cycle again... my buzz and excitement was just killed and I might get so fed up that I just leave and order it online from an automated system that allows me 3 monthly payments with no interest and hope that it is a good one.

I believe one price selling is about integrety. Set your price that you want, that is a smart business decision for the bottom line and stick by it. Sell the instruments, not the price and if it works like it worked the dealership I worked for, you will make up for the lack of haggling in volume.

my 2 cents

 

[fsmith]

I miss the old way. I've spent quite a bit on money the past couple of years in GC and I built up a relationship with a guy at my local store. There were certain items he couldn't do anything about, i.e. Mesa amps, but other than that, he would offer me great deals for being a good, repeat customer. And I never tried to really beat him down, I didn't have to, I was usually very satisfied with the deal he would offer out of the gate.

I called other day and asked how the new policy was going and he said he thought the company was making more money but he felt that they couldn't compete as well and he didn't like not being able to take care of his regular customers. It sounded like he felt bad about not being able to work with me.

It hasn't stopped my buying, I just bought my new Roadster from them last week, and I know that the price is what it is on them, but I do miss the old days, expecially for pedals and other odds and ends.

Marty, thanks for asking!
fred

 

[Beach Radio]

I hate price negotiation. Wicked bad. I will gladly pay more for a guitar at a store where the staff are well trained and they do good repair work. Unfortunately, stores like this are becoming a rarity because more stores seem to be turning in to WalMart - sell them cheap, with cheap nonspecializing labor so you can sell them cheap.
I will pay extra at a good store to have access to good service - and I've NEVER found that at a store that promotes the fact that they're the cheapest.

 

[Nemesys]

I can see having fixed pricing on new gear. GC's new gear pricing is generally quite reasonable already, and this simplifies the process. When my Tubescreamer quit during the Friday night gig and I just need to pick up a new one for Saturday night, a quick, predictable transaction is ideal. However, I don't think this is such a good idea with used gear and trade-in prices -- value is a bit more ambiguous on used gear. I have noticed that GC's pricing on used gear is not always in line with what the items generally sell for, and there are used items that I have bought that I would not have if I couldn't negotiate on the price. Scratch/dent pricing on new gear might be a nice thing to do as well -- I've bought guitars that were priced lower due to some blemish before that I wouldn't have bought otherwise. For all I know, GC already does this?

 

[Lou]

The only time I haggle at GC is on used gear which they are notoriously high on, in my experience. Unless there is something new that I know can be gotten for less. I will generally buy from GC if they will match prices in that instance.

 

[SteveB]

I don't like haggling for gear. (Cars are another story!)

By the time I head out to a music store, I've done my homework online and I'm ready to buy. I hate walking away from a place that haggles, not knowing if I got the best deal I could have. I don't have time to hang around sheepishly, eyeballing the gear in question, waiting for someone to notice.. etc. I want to get in, buy what I need for the best price I can get, then leave.

A loyalty program would be nice if it had these attributes:

1) everything is tracked on GC's network. i.e. they have all my purchases in there anyway, so let them analyze those transactions to determine my 'loyalty' status. I don't want to have to carry a card or something else I'll lose or forget to bring when I come to the store.

2) reasonably long expiration period for whatever 'credits' are earned.. maybe I don't buy there often, but when I do it's a larger purchase. Maybe I like to pay cash for gear versus incurring debt to buy it and therefore don't visit as frequently as some gear addicts. Maybe it's a haul to get to the nearest GC and I only make the trip when I have a definite need (or multiple needs).

3) it sure would be cool to walk up to the register when making a purchase and have the cashier say "hey-- we see that you're a loyal customer and you've earned a x% discount.. would you like to apply that discount on today's purchase or save it for a future transaction?" That would be an awesome program. I didn't have to sign up for anything, my loyalty was recognized and rewarded, and no advertising expenses were incurred by the store for the program. Such an experience would make me want to continue shopping at that place.

 

[SteveB]

more thoughts

A few additional thoughts:

1) lowest price guarantee means nothing to me. I'll make sure the price is right before I leave the house.

2) 30-day no questions return is nice, but I can't think of a single piece of gear that I've ever returned to a retail music store in 26 years of playing. I'd expect the store to take back something that was damaged or broken upon opening it. And it would be nice if they took care of something that broke within the first few weeks without me having to go through the manufacturer. Other than that, I don't really expect the store to let me habitually borrow gear. I guess my point is that the return policy isn't what gets me into the store. I couldn't tell you what the return policy is at my local Mom-and-Pop where I buy almost all of my gear. I know they'd take care of me if the situation was reasonable though. That's all that matters to me in the end.

 

[paranoid70]

Doesn't "haggling" benefit the store and sales person as well? If a customer thinks, wow the tag says $500, but this guy will sell it to me for $400.... is he more inclined to buy it? Also, does that give the store more flexiblity to turn old inventory or make sales when things are slow?

I have never worked in retail, so I am wondering.