Are you a retailer who shies away from increasing prices in the pro shop for fear of upsetting customers? Do you believe low prices are the best way to keep customers coming back? This month, we show you why price isn’t everything and how to keep customers happy without compromising on profit.
By golf retail industry expert, Mark Hopkins
The price of your stock has a multi-factorial effect on your business. How you decide to price items sends a message to both customers and competitors that is fundamental to your brand. While high prices can damage your brand image, low prices imply poorer quality stock and lack of confidence.
On the one hand, customers won’t buy goods that are priced too high but your shop won’t succeed if you price items too low to cover business costs. It’s no wonder retailers often err on the side of caution and keep prices down. When it comes to getting prices right in your pro shop, there’s a balance.
A CERTAIN FUTURE
The economy has opened up after the Coronavirus pandemic and high streets, and golf shops, are busy again. Despite lockdowns and enforced shop closures, golf retail sales didn’t fare too badly during 2020, and XPOS retailers are now reporting a great season of sales, so far. Fantastic news. But just because business is booming now, it doesn’t mean it’s going to continue that way.
Since the pandemic, retail is operating in a different playing field and, largely due to Covid, supply chain issues and the Brexit-effect, prices are on the rise across the retail industry. What’s more, major sporting events, like the football Euros, often have a knock-on effect on golf trade; and we know the weather will change at some point. Putting up prices in line with rising costs will help you to keep some money aside and cover any dips in sales in the future.
COMPETITIVE V’s CHEAP
If your strategy is to undercut other shops in the area, or take on he online behemoths to be the cheapest, you’re undervaluing your business’s potential and won’t make the profit you think you will.
There’s a difference between being competitive and ‘cheap’.
As a business owner, keeping your customers on side and spending with you is your number one priority so it’s understandable that some retailers refuse to raise prices year after year, for fear of upsetting them. So, let’s look at it a different way.
"Putting up prices in line with rising costs will help you to keep some money aside and cover any dips in sales in the future."
Every person who walks through your door is a blank canvas and a new opportunity to be your most loyal customer. Yes, price plays a part in that but, ultimately, you aren’t a typical high street retailer: you have 500-700 members. Bring them back by providing a good experience, rather than cutting prices.
Increases in prices should form part of your strategy to grow your business and are essential in enabling you to invest in improved services and benefits to customers. A new swing room, shop refit or technology to streamline the customer experience, will show Members that you’re reinvesting to add value and provide a great experience.
It isn’t price that buys loyalty: it’s experience and service, and your Members have a genuine desire to support you and stay loyal to their professional team. Aim to provide the ultimate in service and experience to keep them coming back.
There are multiple ways to strengthen ties between the pro shop and customers and your XPOS system is bursting with loyalty-boosting tools.
- XMAIL is the email communication tool that automatically sends timely, relevant emails following a purchase. There’s nothing like a personal ‘thank you’ to warm the cockles of a customer’s heart and remind them how much you appreciate their custom.
- Free to customers paying by monthly subscription, the XPOS Caddie app is a new way for golfers to stay in touch with the pro shop. It’s a one-stop-relationship-shop and a first in the industry. With the app, golfers can:
✔ check and top up their account balance
✔ view and reserve stock for any item in the shop
✔ purchase gift vouchers
✔ see receipts and purchase history
✔ book golf lessons
✔ message the professional team
✔ receive news via push notifications
USE XPOS TO CHECK COST PRICES
When was the last time you checked to see if your costs have gone up? As someone running a business, if your costs are higher than they were a year ago, you could be putting your shop at risk by keeping your prices the same. It isn’t up to you to absorb increases in your costs.
Use XPOS to help you set your pricing for Autumn Winter 21. Go to the online Hub and find your Sales Analysis by Product report and select a date range, starting 2 years ago. Remember, we’re looking at cost of sales, not individual products.
"Your smaller product items should have the largest margins in the pro shop, so it’s a good place to start."
A good exercise is to take a brand, product or style that repeats every year and check what the cost price was to you 2 years ago, and what you’ve paid for Autumn Winter 2021. Do this with recurring standard products such as gloves, balls, food or water, and see where there have been increases. Your smaller product items should have the largest margins in the pro shop, so it’s a good place to start. If you’re worried about too many sudden changes all at once, why not take your 10 highest-selling, ‘lower-value’ items and increase their prices first. You’ll be amazed what a difference it makes to your bottom line.
You can do a similar exercise with the Sales Analysis by Supplier report which is also available in the online Hub.