Wednesday, 4 March 2009

Best Price or Best VALUE?


The debate of best value is by no means unique to the office supplies industry...take airlines for example.

RyanAir has built a business on the basis of "low fares" not best value or customer service. But often its sometimes extreme focus on "discretionary revenue" has come back to bite. Recently the undiplomatic Michael O'Leary declared on BBC TV that the airline was considering charging £1 to use the on-board toilet. This sparked headlines and got RyanAir more free press than anything that the concept of having no check-in desks would have got (which was the reason he was actually being interviewed!)

People who fly RyanAir often plan and bring their own food, drinks etc on-board...bringing your own toilet might be a little too much....but you have to give it to them for spinning a rather dull story into something of note.

But the whole concept comes back to value and the client's perception of it. For some, it is all about the price of the ticket - hence the fact that RyanAir flies 729 routes with 181 aircraft - but for others Leary's manner, Ryan Air's corporate attitude and contempt with which he seems to view the flying public may be more than they can bear and so other, added-value airlines win through. The interesting question is at what point do the price proposition get found out and buyers begin to tot up the incidental costs of paying to put a bag in the hold, paying by debit card, paying for food paying for the toilet....what will be next - perhaps the spoof safety card above suggests some ideas!?

But seriously take this real-world example:
Stanstead to Barcelona with 1 bag in the hold, priority boarding, meal on-board, paying by debit card travelling out 18th March 2009/return 21st March 2009 - total cost?

RyanAir- £87.68 - (RyanAir advertises ticket at £0.01 and £0.00 before taxes!)

British Airways - £91.00

Additionally, the BA flights arrives at Barcelona's main airport - much closer to Barcelona than the RyanAir flight (which would no doubt save you the £3.32 in travel cost!)

So who is cheap and who is not? OK I know you can deselect the priority boarding and bring your own food - but in a like-for-like experience (or as close as you can) BA would seem the better deal overall....did you expect that?

Stationery presents much the same challenges as that of the airline industry....some clients are all about the price of the paperclip, paper, toner etc....for others the ability to speak to a knowledgeable member of our team, know that we are environmentally focused, flexible billing, have a late cut off of 18:00hrs for next day, have a great price on everything they buy not just the "loss leaders" promoted by the supplier and not be tricked by hidden charges (like "protection plus" - Viking Direct's equivalent of the debit card charge from RyanAir) have a value.

But some poor souls will always be seduced by the perceived low price with which such companies play their game. We believe in transparency, openness and no hidden tricks - and in turn we believe that when you really play on a level playing field that much like BA, UOE offers its clients BEST VALUE overall.

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