I am going to Brazil in January. So today, I was looking for a car service to get to the airport. It’s cheaper to take a Town Car to the airport than it is to park my car for the week. I called two services. One was $66.00 including gratuity. The other was $98 dollars, including gratuity. That’s almost a 33% difference.
I asked the person on the phone why his was so much more expensive. I asked if he had nicer cars or something. His response; “That’s our listed rate.”
That answer pissed me off. It was absolutely no help. I attempted to bail him out and said; “I know, but is there something more I’m getting for that extra 32 dollars? Are you cars newer, nicer etc? Why so much more for you than the other guy?”
His response, “I don’t know, if he’s an independent he can afford to charge less, but I have to pay my drivers, gas, maintence etc. so that’s my price.”
Basically what he was telling me was his operating expenses are higher and therefore I’m paying more. Really? It was completely lost on him to explain to me what I was getting for an additional 32 dollars.
No, I’m not spending an extra 32 dollars to subsidize his inability to run a his business. I’m going to go with the other guy.
I have a friend who works for a telecom company. She is constantly losing deals to the competitors over price. I asked her what her customers get for paying more. She said pretty much nothing. It’s resold Centurylink, so the network isn’t differentiated. Her company is trying to differentiate on service. With commodities like telephony services, your customer service better be frickin’ laced with gold and free massages if you want me to pay more for POT’s, VPN, IP etc. If not, I’m going with the cheaper guy. I posted about this a little while back. The lowest price is a business model, not a sales tactic.
If you want your customers to pay more give them something worth the additional money. It’s really that simple!