We’re seeing more and more businesses slash their prices in order to gain exposure through services like Groupon, Living social and their multitude of competitors.
Under the right circumstances, these can be great tactics. However, price competition can create lasting expectations of low prices and attract the wrong consumers who are unlikely to repeat.
Instead, why not compete on something else? How many customers do you really need to get through your doors? Spend time getting to know your customers and what they really want. Do you cater specifically to them or are you trying to be everything to everyone?
Airlines are, with a few exceptions, relatively generic services. You get a seat of some description that takes you to another place. The airline industry has seen huge price competition in recent times. What if they competed on something other than price?
How much of a premium would a business traveller pay on a long haul flight for an important meeting in Sydney to be guaranteed not to be seated next to a screaming child? $200? $500? $1000?
What would that new mother pay to have a bassinet built into the back of the seat in front of her?
What if there was an entire plane dedicated to American backpackers going to Europe for summer
Hotels, too, are relatively generic. In the most general description, you pay for a bed and some privacy. Granted, there are many varieties of quality and location. Could you go further?
What if a hotel partnered with the local marathon during their off-peak season. Instead of price discounts, offer an in-house masseuse, pick up and drop off at the event, and a variety of meals for dinner loaded with carbohydrates. If lots of marathon runners stayed in the same hotel, they may even have a better time as they have so much in common.
Social media gives you the opportunity to get to know your existing and potential customers and engage with them very cheaply. As a result, you no longer need to be everything to everyone. You can find out who loves or might love what you offer and cater to them.
These may not be the best examples but it gives you an idea of a few possibilities. Can you think of other ways that airlines and hotels could really differentiate themselves?