What can we do so that bus rental business owners compete less on price and more on the quality of coaches for hire?
Earlier today I was talking to the manager of a large bus rental company in Holland about the progress of our Rentautobus page and about our efforts to expand in Europe.
He commented to me, “I don’t know what to think; we already have quite a few brokers and booking agents in Holland who are working online and offline. If we had one more, we’d be highlighting inter-company comparisons even more, and therefore we would have to compete even more on prices.”
We’ve heard the largest operators of bus rentals in Barcelona in Spain express similar reservations in the past 18 months. It seems that they think there’s more to lose than to gain if a new concept, such as a comparison and reservation service for land-based transportation enters their market. Since convincing them is rather difficult, we’ve focused on small and medium businesses that are happy to receive requests and to be able to exhibit their profile on our page.
What worried me later, when I thought about it afterwards, was the comment about “competing for price.” That made it sound as if they were only competing over price and weren’t thinking about providing high quality. If a travel provider ensures good communication throughout the business process and trip planning, providing high quality and well-maintained vehicles, with polite drivers who have an attitude of service, while making an effort to reduce their environmental impact only to discover that they’re being judged solely by their price, I can see how they would feel disappointed.
That reminded me of the well-expressed thoughts of a famous social thinker and art critic:
“There is scarcely anything in the world that some man cannot make a little worse, and sell a little more cheaply. The person who buys on price alone is this man's lawful prey. It's unwise to pay too much, but it's worse to pay too little. When you pay too much, you lose a little money — that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot — it can't be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better.”
John Ruskin (8 February 1819 – 20 January 1900)
Obviously, no one wants to pay too much, but how do we stop people from paying too little? How can we prevent this from happening in the bus rental industry? What have you done in your company? What can a comparison and trip reservation tool and a land-based transportation tool do to prevent your clients from committing the error of paying too little? We’re curious to know your thoughts!
How can we prevent private transportation companies in a province like Málaga from undercutting prices too much?
Last year we had transportation companies that were offering low prices to get sales but didn’t budget enough money towards calling the clients about the offer because “calling clients on their cell phones is too expensive.” They lost sales because the clients were upset that they didn’t call them. This may be an extreme example, but we know that offering prices that are too low will hurt us in the long run.
So please share your ideas with us about how this bus rental price comparison tool can stop these errors from being committed.