In our pursuit of greater sales and higher profits, we often do some, well, interesting things. The tried-and-true method of increasing sales is to simply lower the price. But is that the best method? What message are you sending to your customers when you are the cheapest? What do you have to sacrifice to be able to be the cheapest? Service? Quality? Cleanliness?
Is it worth it?
Good service, high quality and competitive price (not lowest price) are the keys of success in our industry. This is like a three-legged stool; the most stable situation is when all three are in balance. I think this is especially true in the retail business. You have to be competitive in all three areas. Your brand refl ects your culture and how successful you are at these key components. If all you have is price, you cannot compete in today’s marketplace.
Nonspirited Service
"Our industry may have taken the low-cost model too far. The Pendelum seems to be coming back."
As a frequent traveler, I expect a certain level of quality and service from the airline so I feel as if I get my money’s worth. I have had the opportunity to fl y on most airlines over the years and certainly have my favorites. I understand the low-cost model and applaud companies such as Southwest that have championed low cost while still giving you enough quality service to make it an enjoyable trip.
On a trip a while back, I mistakenly made price the most important factor in deciding which airline to fly. The low-cost airline, which shall remain nameless, gave me a spirited price incentive to fly its airline. I accepted. My bags, however, did not fly free. They must have flown first class because the charged fee consumed most of the money I saved on the fl ight. I still had a positive spirit as we boarded the flight just a little late. As we backed away from the gate, I was thinking: This isn’t so bad. (I am an optimist.)
Ten feet away from the gate, the engine stopped and the captain came on the intercom to inform us that there was a little problem that would take only a couple of minutes to fix. (He was an optimist, too.) This problem apparently occurred during the 10-foot taxi. Surely, the pilot wouldn’t back up to keep us from getting off the plane and going to a competitor’s airline; that would be bad spirit.
After 45 minutes, as we were still on the ground, the airline exhibited a benevolent spirit and brought the beverage cart around so we could get drinks. It was the least they could do. Well, obviously not, because the water that I asked for was going to cost money. I asked the flight attendant if he thought that was right, considering we were trapped on the plane. His spirited comment was that it wasn’t his fault and that it was company policy. I declined his offer.
As I looked longingly at the concessions 10 feet away in the terminal, I discovered that I had Internet. No, the airline did not offer Internet. We happened to be close enough to pick up the free Internet in the terminal. I took advantage of the downtime to craft a spirited letter to the president of the airline to try to help him understand that the best companies find a balance between good service, high quality and low price. Going zero for three is not a good model for future success. I made him a promise that I would not fly his airline again. I have kept that promise.
Going Beyond Price
I think our industry for years was on a path that may have taken the low-cost model too far. The pendulum seems to be coming back as the industry continues to improve its brand promises with new and improved facilities, higher-quality fresh foods, and more services to entice customers into a retail experience that is vastly different than it was just a few short years ago. In recent meetings I have heard stories of convenience chains hiring professional chefs for their stores along with coffee hosts as a way of heightening the coffee experience. These chains are also focusing on improving the quality of their offerings to truly compete with fast-casual and fast-food alternatives.
No longer is low cost the only answer. Sure, you have to be competitive. But I see that quality offerings and heightened service are as important as competitive pricing.
Is your offering balanced? What about your brand? Facility? Foodservice? Services? I think we have the opportunity to really make great strides in the competitive marketplace.
The bar continues to rise. Are you rising with it?
Mike Lawshe is the president and CEO of Paragon Solutions. Reach him at mlawshe@paragon4design.com.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.