The March 15th issue of Bus and Motorcoach News contained a letter to the editor discussing sustainability in the motorcoach industry -- specifically as it relates to pricing.

While we agree with the author on some points, such as the increasing cost of new equipment, training and rising customer expectations, we felt it important to point out not only some of what makes our industry unique but also how pricing strategies can play a role in your overall business plan, and how best to compete with and understand the "race-to-the-bottom" competitor.

First of all, lets be honest - we have all complained and grumbled when confronted with a competitor that "just doesnt seem to get it" because he or she "low balls everything."

In fact, they may be doing just that, and likely wont stick around long. But consider your own pricing strategy: Do you employ a variable pricing model such as the airlines use?

For instance, do you have one rate when you are at 25 percent capacity, another at 50 percent and so on. Perhaps your competitor is doing the same and the rate your customer is confronting you with is your competitors 25 percent utilization rate.

Frustrating certainly, but what are YOU going to do about it. You cannot control what your competition does, but you can control your own destiny.

This type of pricing strategy is called yield management -- the process of understanding, anticipating and reacting to consumer behavior to maximize revenue or profits.

Airlines, rental cars and hotels all use this strategy. So do the new scheduled-service intercity bus carriers, as well as Amtrak.

When you think about it, this is a good way to keep your competition guessing, and presents you with an opportunity to explain your pricing to your customer and sell your companys strengths -- be it your employee training and experience, superior equipment, or valuable passenger amenities such as Wi-Fi or satellite TV that perhaps your competitor does not offer.

Reliable academic pricing models may be great in a classroom, and they can certainly serve as a benchmark, but in the real world you need to deal with real competitors who are dying to eat your lunch, and it doesnt matter if it is in the motorcoach industry, retailing or the fast-food business.

How can McDonalds sell two egg McMuffins for $2 and make any money? Likely they are not this is a pricing strategy designed to get you in the door to try the product and hopefully you will come back for lunch or dinner sometime later in the week and order off the retail menu.

The same works for the coach industry.

And keep in mind the transit industry for years was accustomed (and still is when it can get away with it) to giving service away for community recognition and awareness.

From a personal perspective, we both have seen the value of stepping up to the plate as a community partner when duty calls. Does that mean free service? Not necessarily. Maybe its service provided at cost or bartered in exchange for advertising or other benefits that only you can put a price tag on.

Most people understand there is no free lunch in this world and basic costs of operation need to be covered. With that said, however, it is vitally important to realize it is not ultimately the consumers responsibility to understand our industry - they are generally looking for value - the best value to be more specific, and yield-management pricing helps us meet that expectation.

If we as an industry embrace the value in community-based partnerships, that ever-widening gap between severely pressured transit agency budgets and the publics increasing transit expectations can only be filled by the private transportation sector. We are the only ones that can fill that void so lets be ready for it.

There are additional resources the customer can use in selecting a qualified and safe carrier, such as the federal governments www.safersys.org, or is the company they are considering a member of an industry organization such as UMA, Trailways, IMG or a state association? Has that company received industry recognition, such as a UMA Vision Award or been featured in an industry publication?

And, as for academic benchmarking, go one better - join a UMA 20 Group. If your competitor is not in one, you will see what they are doing wrong and likely be less concerned about it. And if they are in one and you are not, maybe there is a reason your lunch is getting eaten.

-Godfrey Lebron, Paradise Trailways, and Brian Scott, Escot Bus Lines