Low Ballers Diminish Values

Jim Luff
Posted on August 29, 2012

Don’t play the cutthroat game and let the loose players die of natural causes.
 
It is always frustrating when a new company opens up in town and starts low-balling everyone else to try to gain business. It really tends to diminish the value of what we have to offer.

I wish that it was legal for all the transportation companies to get together and just fix the bottom line price on every vehicle type and style and make a pact that no one will go beyond a certain price point. However, the federal government refers to these practices as “collusion” or “price-fixing” and other nasty terms that violate anti-trust laws.

There are ways to combat this but the point is, we shouldn’t have to. When people call and ask me if I will match someone’s price, I always reply, “It depends on what company we are matching.” I go on to tell them my favorite analogy of the situation. 

Before even asking what company I am competing against, I preface the quote with a statement. “You and I will both agree that you can’t call the Ritz-Carlton and ask them to match the price of Motel 6 right? We probably would both agree that we know what the expectations are for a Motel 6. Tom Bodett will leave the light on for you. He will provide a functional bed, a television, some plastic cups in the restroom with some cheap soap and some of the thinnest towels known to mankind.” 

I go on to describe what the expectations of the Ritz-Carlton are from the moment you arrive. I explain how all employees of the Ritz-Carlton go through mandatory training on delivering impeccable customer service.

Well, that’s how we are here at our company. We take training seriously. We take vehicle maintenance seriously. We take customer satisfaction seriously. We take safety seriously. So, we are never going to have the lowest prices in town because you can’t be the best by charging the least. We also recognize that some people prefer Motel 6 for the budget savings while some demand nothing but the best and that is why they stay at the Ritz-Carlton. So, with all that being said, we consider ourselves to be the Hilton of the local transportation companies. What company is it you want us to match?  Depending on the answer to our question, we will respond appropriately with whether we might price-match or not.

The great thing about low-ballers is they end up killing their own business. You cannot charge below market value and save enough to replace your cars or keep them in good shape or pay for quality help. Quality help does not work for peanuts. So, hold your rates, bide your time and watch them die off when they run out of money to keep going.

— Jim Luff, LCT contributing editor

Related Topics: customer service, Jim Luff, operations, Sales & Marketing

Jim Luff Contributing Editor
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