According to multiple market research, in any given category only 10% of people buy solely based on price. It means that 90% of the people buy on criteria other than price. Yet most taxi business owners are convinced that their customers are cheapskates. Most taxi business owners behave as if their customers have only one criterion for choosing a taxi service and that criterion is price.
Don’t believe the fact that only 10% of your customers buy based on price? Look out of the window, then. Look at the cars passing by your window and count the makes and models of cars. If everyone was buying cars based on price, there would only be one model and make – the cheapest one, Nissan Versa S Sedan, that currently goes for $12,780.
Now tell me: how many grocery stores do you have in your town? If everyone was buying solely based on price, there’d be one grocery store. Or several stores of the same chain.
Some of you will continue to insist: yes, but the customers of my taxi service still want the cheapest possible service. So let’s summarize: most people in your town do not buy based on price, yet most of your customers do? The question that pops up here is: how did you attract all the cheapskates? What did you do that you ended up with all the price-shoppers?
A lot of taxi business owners who are struggling with being the cheapest believe that money is a zero-sum game. It means that if someone gives you money, they’ll have less. If you take their money for your service, then they won’t be able to buy food or something. This way by providing service to someone we are robbing them of something else, something more important.
In reality the money is not a zero-sum game. The money is like water in the ocean. What happens when someone pays you? You buy something else! You pay salaries, rent, utilities and so on. You buy something and the money changes hands. Monetary exchange is infinite and when you take money from people, they replenish it. Most people around us have ways of replenishing the money. Someone like you has a business. Someone goes to a job and get a paycheck, but pretty much everyone around you has a way to replenish the money.
What about “fair prices?” What prices are fair and what prices are unfair? What about all those poor folks who will spend it on your taxi and have nothing left? Truth is, I drove a taxi myself and I saw a lot of these poor folks. A lot of them smoke. A lot of them drink. They don’t eat healthy and cheap at home, they eat out, which, even at Micky D’s isn’t cheap at all.
They don’t have any money not because of you, but because they are spending it left and right. And if they don’t give it to you, they’ll give it to someone else. They’ll spend it on McDonalds, cigarettes, alcohol, you name it. If they wanted to be saving and not spending – they’d be doing it. Today. With or without you.
From your perspective it may look as if a broke person is taking a cab and you are “stealing” from him. However, that’s only your perspective. You can’t look at things from the perspective of that other person. You don’t know if he has a really hard job that drives him crazy and the only thing that is keeping him sane is taking a cab ride to and from the job.
Imagine yourself that you’ve had a really hard week, came to your favorite restaurant, yet they are refusing to serve you, because they think that instead of spending money on food you should send it to starving kids in North Korea. Would you like such an attitude? What would you think of a person who will start tell you how to spend your money? Most likely, you are not going to like it. Yet that’s exactly what you are doing when you start making decisions for those who take your taxis.
You can learn more about pricing strategies and increasing the profits of your taxi business from my book “17 Critical Mistakes You Must Avoid That Can Ruin Your Taxi Business.” CLICK HERE TO GET YOUR COPY TODAY!