Setting comeback pricing: Resist the urge to race to the bottom

My buddy and I rolled backward off the Cape Ann Diver into the water and began a race to the bottom.

The Nina T was a 70-foot Eastern rig trawler that had sunk at the dock when her ancient hull grew weary. We’d spent hours underwater stapling strips of wood over sheets of plastic to make her watertight (don’t try this on a steel hull, and DO NOT borrow your neighbor’s staple gun). At low tide, she was pumped dry, strapped to a barge and towed out of the harbor into 100 feet of water.

Dave Millhouser on his diving boat.

A fire-boat hosed her full, and she disappeared below the surface. My friend and I each wanted the coveted title of “first to dive the wreck of the Nina T,” and descended into the ugly mud cloud a vessel makes when she strikes bottom. It was spooky, so murky, we still don’t know who won.

Dark and dangerous

As the first faint stirrings of a reviving bus market appear, there’s a danger of the industry engaging in a similar race to the bottom. Trust me, it’s dark and dangerous down there.

Rumors circulate of carriers bidding $1.50 per mile on military moves, and the temptation to take work at absurdly low prices is huge.

Please understand that, while I see your pain, I can’t feel it. That’s weasel talk for “easy for me to say.” It’s been decades since I was involved in operating buses.

Dave Millhouser ready to race to the bottom.

The desperation to get drivers working and move coaches is understandable, but if we go too far, we’re damaging opportunities in a post-Darwin market.

We can’t (and shouldn’t) discuss “fixing” prices, but this is advocating a thought process.

Bad things happen

At least two bad things happen in a bus rate race to the bottom.

First, we set pricing benchmarks. Customers will expect similar pricing when business starts to come back, and won’t be particularly receptive to excuses. In the back of their minds, they understand loss leaders during desperate times, but it’s the front of their minds that negotiate.

 Hang on … gonna swerve here. This is where real, long-term relationships pay off. If you’ve made the effort over the years to treat clients like partners, not paychecks, they’ll be more willing to identify and reward quality.

Back to the main drag.

Second, many operators have been involved with rallies in an effort to raise the awareness (and image) of the motorcoach industry. We believe, correctly, that we aren’t accorded the respect we’ve earned. We chafe at the perception we’re transportation’s lowest common denominator, and have, of late, spent a ton of energy trying to let politicians and the public see us in a better light.

Confirming old view

Competition based on pricing alone confirms the old view of our worth.

Many operators were already on a slippery fiscal slope, and went over an unforeseeable cliff that wasn’t anyone’s fault. Hopefully they’re poised bruised and battered at the bottom ready to start clawing their way back.

Dave Millhouser at the bottom.

“Those who do not learn history are doomed to repeat it” is a version of a phrase likely coined by writer and philosopher George Santayana (I was surprised to find that he is NOT the guy who attacked the Alamo). That’s fancy talk for, “When you’re in a hole, stop digging,”

We’re going to be a smaller industry (painful, but true). If we now market based on an Annie Get Your Gun paraphrase, “Anything you can do I can do cheaper,” we’ll only confirm the public’s perception. You know, the ugly one we’re trying to change.

Since no one in our industry has ever experienced this before, I’m at a loss. There isn’t anyone to steal ideas from.

Distinguish yourself 

Internet/social media presence is a bit like weighing 270 pounds. If you’re going to play defensive tackle in the NFL you HAVE to weigh 270. It’s a given.

Just as every tackle is a big boy, virtually every operator has a digital footprint. If you want to keep playing, you need to find additional, substantial ways to distinguish yourself from the other fat guys.

Moving on with the football metaphor, bear in mind when taking advice from consultants or clueless columnists (like me) that we’re playing “fantasy football” while you’re on the muddy field getting clobbered. We mean well, might even get a few things right, but YOU are at risk.

Best guess is that the folks who will do best are the ones who work at building relationships and earn the right to tell customers that they’re worth a bit more.

Resist as much as you can the urge to win the race to the bottom.



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