MOHEGAN SUN RESORT & CASINO, CT — Mark Munoz of Boston Coach, along with Jeff Nyikos of Leros Point to Point and Jeff Rose of Attitude New York told attendees at the LCT Eastern Conference earlier this month how they don’t have to lower their prices to get business.
Munoz cautioned attendees, “People talk. Lowering prices will only hurt your image and cheapen your brand. You should charge what you are worth. Lowering prices is not sustainable and it will not make you profitable.”
Nyikos asked, “If you are the best, why are you competing on price?” He believes that if you raise your prices, you won’t actually lose much work. Nyikos challenges operators to be more creative, but first understand what the true of cost of a ride is.”
Rose looked at it another way, “Sometimes you have to have the guts to say that I am going to walk away from this business. It is very important to understand the cost of operating your business. Why would you elect to lose money?” He points out the opportunity cost of doing discounted work. “What could occur when you do a discounted job is that you will later have to say no to a more expensive job.”
All agreed that is was truly a fallacy to say that lower prices will keep cars rolling.
How then do you sell your service not on price? Nyikos believes that you only need to add value. He gave the example of a hotel getting its standard price but “upgrading” the guest by putting them on the concierge floor. “Know what services is a value to your clients. Corporations may have it in their charters to only deal with companies that are sustainable. If you can offer them an alternative that fulfills this need of theirs, you will gain that business.”
Munoz suggested that you sell the value of your service. “We may be a little more expensive but we have an outstanding safety record.”
Rose ask the audience to put themselves in the shoes of a negotiator, “When someone starts to go down on price you know that you have got them and that they are weak.”
The group suggested that you think in terms of what will help your clients and get you the business. Munoz gave the example of group transportation. “You want to protect the core transportation rate. If you have to discount, then do it on ancillary vehicles. We also discount on coordinators and greeters. We may give them a coordinator or greet at no charge while keeping our pricing fixed.”
Nyikos is looking at different opportunities to provide transportation services. He is working with restaurants, vineyards, and theaters to provide packages that have the transportation cost built in.
Munoz suggested perhaps that instead of discounting, pay a rebate based on volume. He also suggests that you set parameters. If the client gets to the volume they say they will, then you rebate them back a percentage of the ride. Munoz feels that you shouldn’t give it away at the onset but instead review after a period of time and then apply it as a credit.
The group also thought that charities were a great way to gain business. Rose said, “I will do charity work if the client gives me his other work. Charities are great places to get exposure for your company to the people you want to be in the back of your vehicles.”
Nyikos recently worked on a major golf outing. “The day before the event they had a Pro Am tournament. We worked out a way that we went and picked up each of the participants and then took them home after the event. Our pricing on this was very aggressive, but it put the people we want to sell to in the back of our vehicles.”
Rose believes that, “When the discussion with your clients turn to price, you are losing the battle. You want to think about how you can get the conversation away from price. Make sure that when you are giving something away that you are always getting something in return.”
Nyikos said that operators could give rebates based on timely payments. “Make the contingency trigger the discount.”
The group threw out the following suggestions for proms and weddings to add value without reducing price:
• Stocking bars (when legal and above legal drinking age)
• On site coordinators
• Free additional hour
• Free wait time
• No charge for stops
• Reduced minimums
• Free trail car when using classic vehicles
• Complimentary honeymoon transfers with wedding packages.
Source: Linda Jagiela, LCT Magazine