Issue link: http://psai.uberflip.com/i/1171504
W EEKLY EDITION SEPTEMBER 25, 2019 Pri ce W ar s: Tact ics for Competi ng Aga i nst a Low - Co st Com pe ti to r (P art III o f a s er ies ) By Karleen Kos, PSAI Executive Directo r • The components of cost. If you help them understand where corners likely have to be cut to sustain rock bottom prices, perhaps the customer will be able to see that quality or service that matters to them is likely to be compromised. • The importance of usi ng a company with a track record of responsible waste disposal. In some jurisdictions the customer is culpable if waste is not disposed properly, regardless of whom they hire to take it away. If the lowball company doesn't have a proven history of waste di sposal in your area, point this out. • How much business and reputational damage the event customer will experience if the portable sanitation is subpar. Have some case studies handy – the PSAI can help with this. • The negative effect poor portable sanitation can have on employee morale and efficiency. The PSAI has resources for this as well. Option: Change customer choices. Sometimes you find you must lower or otherwise adjust your prices. If you need to do that, consider a method in which you reduce the overall effect on your business. For example: • Change up how you price . Remember the airline price wars? Discount carrier A lowers a round trip ticket to $200 – but starts charging for a checked bag. Carrier B feels they also need to lower their advertised price to $200 and they boast that bags are free. To make up the difference on their bottom line, they change their frequent flier program and increase the fee for pets and unaccompanied minors. How can you adapt this idea to portable sanitation? Can you f ind ways to meet certain aspects of your competitor's prices but increase charges elsewhere to recoup some or all of the effect? • Fighting brand . This technique allows you to lower prices without diluting your main brand. In general, you want to compete on quality, so you keep your main brand "Top Quality Portables Inc.," at the higher prices. Use your best equipment, service options and best products for these rentals. For those customers who absolutely insist on bare bones pricing – and that you think are worth keeping – create a sub - brand called something like, "Economy Portable Rentals" with its own logo and rental agreement (you'll want to talk with your accountant and business attorney about how to set this up.) For "Economy Portable Rentals" use your older equipment, less costly products, and provide the least service that is consistent with standards. P AGE 11 CONTINUED ON PAGE 12