Forbes contributor and Retail Minded founder Nicole Leinbach-Reyhle wrote Saturday (Aug. 23) about PriceWaiter, a startup that creates a “Name Your Price” button for a business’ website -- basically turning any e-commerce site into something like Priceline or eBay (see above screenshot from PriceWaiter website).
It’s not worth my time to haggle down the price of that 10-pack of plain white socks.
Many online consumers are accustomed to bidding for hotel rooms or for used goods, but would a "Name Your Price" button work for everything?
That depends. Bidding works for items with comfortable margins, where there’s room for negotiation, or purchases that can be bundled (e.g. "We’ll accept your lower offer on that laptop if you also purchase this extended warranty or laptop bag, etc.")
Bidding wouldn't work on items that are everyday purchases and don’t require a lot of research or price/feature comparison. It’s not worth my time to haggle down the price of a regular toothbrush or that 10-pack of plain white socks.
It would make sense for any retailer allowing bidding to take a cue from eBay and offer a 'Buy Now' button as well.
In the article, Leinbach-Reyhle lists “three reasons ‘name your price’ may become the next deal in shopping”:
- Customers want to feel like they are in control. Agree. Consumers are growing skeptical in some cases. They are looking for a catch or the fine print when they see a great deal. This brings them right into the process and could even help build stronger relationships between the retailer and its customers.
- Customers enjoy the idea of getting a deal. Agree. Not only do consumers love a great deal but they love talking about a great deal. This could have hidden ROI benefits of having your customers share the great experience they had with you.
- Customers love the process of negotiation. Yes and no. Not everyone loves negotiation. If they did, you wouldn’t have people who walk into a car dealership, put down their cash, and drive away with their new car without going through the song and dance most of us do (yes, apparently this does happen). For some consumers, time and convenience are more important and bidding would be seen as a waste of both. It would be a good idea for any retailer who implements the “Name Your Own Price” button to also follow in eBay’s footsteps and also offer a “Buy Now” button that simply allows the consumer to accept the original price carry on their merry way.
Priceline is successful because it pulls hotel room options from millions of hotels at once, allocating available rooms from participating hotels to consumers willing to bid a sufficient amount. PriceWaiter does not do all that back-end intermediary work -- it’s presumably left to the merchant to decide which price is appropriate. Could PriceWaiter just end up creating more work for the merchant?
Implementing the “Name Your Price” button would require more work than simply putting the button up on your website. From the looks of PriceWaiter’s website (without requesting a demo), it appears users would get access to a back-end portal that helps them organize, approve or deny incoming bids.
Adding a 'Name Your Price" button to your retail site would require staff and a fair bit of homework.
Naturally, this is going to take staff dedicated to not only checking when bids are made (and depending on the size of your company, this may be a full-time job or even jobs) but staff would also require knowledge and authority to deem a given bid acceptable for a certain item.
Still, if bidding entices your customers to make a purchase or even speed up a purchase decision, that’s definitely worth something. Retailers could easily set up metrics to track the success of the strategy compared against the HR and operational costs to run it. It won’t work for everyone, but it has potential to be a game-changer for some.