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    « The Three Stages of Truth | Main | Obsolescence of Music CD's »

    March 16, 2010

    No More Meals in Coach...or Free Deliveries

    Continental is the last major U.S. air carrier to stop serving meals in coach class.  Traveling by air used to be a luxury.  People expected frills.  If you are paying that much money you should get treated well and a good meal was expected no matter how short the flight was.  Airplanes have become buses in the sky.  You don't get a meal on a bus.  Air travel is no longer a luxury.  It is a commodity.  Companies like Southwest or Ryanair set out to compete with travel by car.  As a market becomes commoditized and profits race towards zero there is little room to "throw in" additional services.  The irony is I'm sure many people in the airline industry resisted this change.  "If we don't provide meals we will loose customers."  I'm sure there were people at Continental who said "This is one of our competitive advantages.  If we take this away we will lose customers."  I don't think so.  Its also not just a matter of taking things away.  It is an opportunity to change the service.  They take away the "free" meals in exchange for a better meal as an option at a reasonable price.  I prefer to have a decent meal before or after the flight.  If I choose to buy a meal on the fight I expect to get something good rather than the mystery "meat stick" I was tossed on a United flight two years ago.

    Printing services are being commoditized.  Just like the airline industry can't afford to offer all the frills, some of the services that have been offered in this industry cannot be offered for free anymore.  Examples of these are free pickup, free delivery, unreasonable turn around times, and unlimited file preparation.  Changing your pricing and service offerings is not something to be done whimsically.  You need to think through how it is presented and received by your customers, but the alternative to not addressing this is declining profits.  I have found that somewhere in most companies you can find a reasonable ear that understands that their vendors must run profitable businesses.  As I heard from Cameron Herold at BackPocket COO.  "You need to look at other industries to see how they dealt with challenges you are facing.  More than often other companies or other industries have experienced similar issues.  Engage in R&D (Rip-off & Duplicate)."

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    Comments

    Ricardo Martinez (PLP)

    John, I agree with you. When you are declining prices, firs you must look at inside to know how your business is structured. Then you can find extra points to charge. Most of the customers understand that profitability is key for any business. But as you said, if you have to pay for something that is awful you refuse to use it, or maybe change the provider.
    Charging by certain services is not bad by itself. But you must redesign as if it were another product to sell.. I mean. If you charge by delivery, maybe a simple tool for your customer to track the times in the website is good enough to make them pay...
    Otherwise, if they must pay for what previously was free, they will fell you are reaching prices...

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