Tuesday, 23 November 2010

Simples - not really - lowest cost comes at a price!

The lack of blogs and tweets from me this month has been due to the time spent travelling back and forth and up and down the country. The content for such blogs hasn't stopped appearing though and the main theme for today's blog 'the price to be paid for low cost' is as a result of all this travelling.

Price one: Unacceptable behaviour
Have you noticed what sort of people we turn into in order to get a seat when using low cost airlines? The tannoy announcement squeaks into life and we're all on our feet and pushing forward. No one listens or cares about the priority boarders and young children who have to fight to come forward. We seem to only care about ourselves - eyes are kept firmly looking at our feet as we push forward to ensure we get choice over where we sit! Not a great advertisement for humanity - and I won't even start on the behaviour once on board trying to put bags into overhead lockers.

Price two: Suppliers start to charge for all those extras
It's a wonder anyone can determine who offers the lowest cost when we get charged for all those extras. Which of course will differ between airlines and on recently trips have included:

A seat - with one airline I have yet to find out how to say I don't want to pay to choose my seat
Airport check-in - when the email doesn't provide any links to do it online
Airport bag-drop - when the internet wouldn't let me change my details when plans changed
Payment - ranging from £4.95 (go on why not just say £5) to £9.95 (£10)

I appreciate these charges should enable me to choose whether to receive the service or not. However being charged for 'must haves' (a seat, payment) and increasing the likelihood of us having to pay the additional admin fees for airport handling are simply ways of increasing revenue for the airlines.

Price three: Specification drift
Is lowest cost what we really want then the lowest car hire price means ringing them up when we arrive at the terminal for them to send a minibus to come to pick us up to take us to the hire car!

Price four: Poor Service
A great example was when we were asked to put our coats and bags on our knees because the overhead lockers were full and people still had bags to put in them!

You might think I'm just having a bad day and enjoying the rant - and yes that's true - but all of these 'Prices' are also evident where we work too. In my own discipline of purchasing it's all too easy to see unhappy suppliers doing the same as the airlines and making us pay for forcing the price down. As a local MD of a SME said to me the other week "that last 10% cost reduction has just cost them all the good will. They will pay for everything extra and I can assure you that will cost them more than 10%".

What price is your company paying in it's search for lowest cost?

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