You can't win a price war

Very few people like their airline experience anymore.  Even the pilots were upset about process.  The airlines were at one time known for luxury, civility and a unique travel experience.  Now they’re busses that fly.  The conversation changed from having an experience to a pricing haggle.  American Airlines is trying to change the conversation but it may be too late.  They’ve pulled out of Orbitz.com because they saw it as a place for us to have “price wars” over tickets.  They say they want the conversation to be different.  I applaud that (even if I don’t believe it).  When the only motivation your customers have for choosing you over someone else is one thing (in this case price) then there’s only one way to win, dominate that category.  The problem with trying to win a price war is two fold.

1. Customer’s expectations usually don’t change.  People want great products/services no matter what they cost.

2. Competing on price is the quickest way to go out of business. It’s called “a race to the bottom” because if cash is king in keeping your business afloat then taking less cash for everything you do is counterproductive to a healthy business.

2. Offer better guarantees. Bed, Bath and Beyond has the best return policy I’ve ever experienced.  I worked there for a bit after college and they’d take anything back that we carried in the store.  No receipt, no box…no problem.  People (like me) will pay more for the same item if we know that your guarantees are better.

3. Sell experiences, not products. A cold beer at Wrigley Field will set you back about $8 .  You can buy a six pack a block away for that price but people aren’t just buying a beer, they’re buying the American past time in one of the greatest places to watch a sporting event in the world.

4. Sell you, not your product. You might be the biggest draw for customers.  Are you the most entertaining cook, passionate toy expert or the friendliest dentist known to man?  Then you can sell the same food, toys or fillings as everyone else but beat the competition because of YOU.  People love to buy from poeple so don’t be afraid to make you or your unique employees the difference between your competition and you.