Apr
15
I came a cross the most bizarre thing last week.
It's a piece of software that compares your online rate with those published by a group of your competitors, then it adjusts your rate so you're positioned somewhere (and you can choose where) close to them. It'll do this all day, every day, whenever a price changes in your competitive group.
The hotelier who showed me this system beamed at me,
"Your don't have a system that does that, do you?", he said.
He's quite right of course. I don't. And for the life of me, I can't think of a reason why I'd want to.
Price is important, don't get me wrong. But just because you can do something like this, it doesn't mean that you should.
Let me explain why...
It's a piece of software that compares your online rate with those published by a group of your competitors, then it adjusts your rate so you're positioned somewhere (and you can choose where) close to them. It'll do this all day, every day, whenever a price changes in your competitive group.
The hotelier who showed me this system beamed at me,
"Your don't have a system that does that, do you?", he said.
He's quite right of course. I don't. And for the life of me, I can't think of a reason why I'd want to.
Price is important, don't get me wrong. But just because you can do something like this, it doesn't mean that you should.
Let me explain why...
Do you really have such little faith: In your product; the value you offer and your price - that you will allow your competitors to effectively set your price?
Do you really want your prices presented to your customers in such a way that they constantly vary? And don't you think that might be just a bit confusing for the buyer?
If one competitor has come up with a really innovative and clever marketing strategy, part of which involves a deep cut in price but also involves a series of other tactics (which he's not likely to share with you) designed to boost revenue - using the logic of this system you'll only copy the price reduction. You won't be able to copy the useful bits.
You can get yourself in all sorts of trouble by simply copying competitors pricing. Does your business have the same cost structure? Are you labouring under debt repayments that competitors don't suffer? Are your employees as efficient as theirs? Do they have the same business onjectives as you?
If you can't answer these questions (and several more), why would you want to copy somebody elses' price?
Do you really want your prices presented to your customers in such a way that they constantly vary? And don't you think that might be just a bit confusing for the buyer?
If one competitor has come up with a really innovative and clever marketing strategy, part of which involves a deep cut in price but also involves a series of other tactics (which he's not likely to share with you) designed to boost revenue - using the logic of this system you'll only copy the price reduction. You won't be able to copy the useful bits.
You can get yourself in all sorts of trouble by simply copying competitors pricing. Does your business have the same cost structure? Are you labouring under debt repayments that competitors don't suffer? Are your employees as efficient as theirs? Do they have the same business onjectives as you?
If you can't answer these questions (and several more), why would you want to copy somebody elses' price?
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