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How To Compete -- And Win -- When Rivals Cut Prices


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#21 floatingcastles

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Posted 08 May 2013 - 06:34 AM

you can also look it from the other side: if you take it into account from the beginning than it isn't a problem.

something like: I want to give return customers a better price (small discount), put your initial price a little higher, that way you have some margin from the beginning.

And yes, I rather give a small bouncer for "free" to get a deal in, instead of giving them a bigger discount. Setting up those small ones (like a wacky mini bouncer or so) is rather quick.

 

 

Good Post!

Can you and others elaborate on examples of adding value instead of discounting. Ecspecially when your in an area where craigslist is so popular and seems to be a mainstream of free advertising for inflatables.

In the Dallas area craigslisters are renting bouncers for an average $75 and as low as $60. I do not advertise on craigslist frequently, but when I am slow or low on rentals I do. I only post the unique inflatables that I have and the cragslisters dont.

Although your market is saturated, you don't want to ever start out with a discount. That would lead all new clients to believe they will receive a discount on their rentals. I'm new to the Bounce House rental business but I've studied business's for a while now and understand how they operate. Adding value would simply be  adding tables and chairs or maybe throwing in a snow cone machine or popcorn machine to show the customer there getting there monies worth. Keeping your rental price the same or even rising with those extras.  A key items that will grab your customers trust is SAFETY. If you can obtain the customers trust you've got the sale no matter the price, especially when it comes to their kids. 

 

You can look into having your equipment inspected by your State which would wow the customer in the since that your equipment is certified and reliable. 

 

You can look into getting the Mad Dog siren system which sits in between the extension cord and blower. It emits a loud 120db siren when power failure occurs. They are about $100 to $200 bucks. An alternative is a GFCI lockout device. It's about 30 bucks at your local hardware store. Does the same thing as the mad dog just doesn't make noise, but still prevents your blower from being destroyed in the event of power lose or surge.

 

I'm not sure if you have employees or not, but you can hire a staff member to work the bounce house while the adults and kids enjoy the event. Just make sure to have insurance coverage with that.

 

Make sure to use 12ga extension cables and explain the benefit and reason.

 

To sum it all up, you must be able to provide excellent customer service with a bang. 

 

 

I think this video will be beneficial to you for negotiating. I encourage you to watch it. 


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#22 BigSkyPartyRentals

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Posted 21 June 2013 - 09:18 AM

The only time that we ever offer discounted pricing is on a Monday through Thursday rental if it is a slow week. Or certain church or non-profit functions. We have a long standing relationship with many of those organizations in this area so we like to help them out and make them happy.



#23 jumpingput

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Posted 26 June 2013 - 12:17 AM

I know offering weekday discounts is common but I don't really get it. I'm assuming that the weekday rentals are not that common because if they were, there would be not point discouning them. If you are a small operator and have a day job, it would usually mean you have to take the day off of work. If you are a larger operation that has employees, does the discounted price really cover the labor & delivery costs and still provide worth while profit?

#24 Spoiled Rotten

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Posted 26 June 2013 - 03:12 PM

Weekday discounts are quite common for many, we have been know to offer them as well with certain time restrictions and for residential only.

 

One thing to consider is that if you are a full time operator and you have staff in to clean for the day as it is then why not make a few deliveries as well. Even if you are offering $50 off a water slide a little income for a day you already have labor in is better than no income at all.

 

That being said I have not done any discounts this year other than a few personal donations.

 

Our schools and churches are disappointed in our decision to not discount but they also understand in ways, some chose to go elsewhere, most stayed.

 

A wise man once said $100 in your pocket is better than a swift kick in the $&^%. However, that only works if you can net that $100 or at least make it worth your time. If you have people working and labor being paid already, what does it really cost you?



#25 MWC

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Posted 06 January 2014 - 08:26 PM

http://www.stluciebo...ort-lucie/c1f2i



#26 AtlantaLarry

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Posted 08 January 2014 - 07:31 AM

Always add value to the rental. I never discount a jump, that's my "sale".. But adding value can be going to a bigger piece for less than it normally rents for, adding a concession and throwing in a game. Letting them keep it an hour.. $50 off the 2nd inflatable..



#27 AtlantaLarry

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Posted 08 January 2014 - 10:44 AM

I don't discount much... If ever.. But I won't lose a $1000 rental over $100....

 

and it's Harber with an E.

 

I send them rack rate pricing... and then a package discount. Never x% or discounted line items. I used to bend a lot more... The bigger we get the less we beg for business.. :)



#28 JumpAndJamLi

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Posted 08 January 2014 - 03:37 PM

I don't discount much... If ever.. But I won't lose a $1000 rental over $100....
 
and it's Harber with an E.
 
I send them rack rate pricing... and then a package discount. Never x% or discounted line items. I used to bend a lot more... The bigger we get the less we beg for business.. :)


Well said!
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#29 FunVentures

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Posted 19 March 2014 - 08:02 PM

I only offer discounts to Uniformed personnel (cops, military, and firefighters).  Other than that, I just offer employees who act in a professional manner and clean unique units, that alone has helped me gain customers from my competitors.



#30 JP's Moonbounces

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Posted 13 April 2014 - 08:23 PM

what does a brand spanking new business owner do then to gain customers? i was thinking and since im brand new to the business this year i was going to run a "bounce into spring" type of discount were rent any bounce from my company and i will give them a 15% discount up until may 31st...but after reading all of this i tend to think that doing that is not good for me at all since i am new and trying to gain my 15k investment back...help is always appreicated here. thanks



#31 bounce2this

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Posted 15 May 2014 - 08:57 PM

I remember I gave a spring discount back when I started in 2011. It didn't help earn me repeat customers or help spread the word. Even though my jumpys were decent my setups were pretty lame. Then when those customers actually did refer me to someone after my "spring sale" they were upset they weren't getting the discount. You're really just working harder for less money. I've since upgraded my inventory and equipment, personally provide awesome service, and am working on increasing income & value per delivery. Great post and insight from everyone and I thank you all.

#32 BounceAboutPartyRentals

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Posted 18 May 2014 - 01:08 PM

I must be swimming alone in the discount waters. . From day one, I offered a 5% discount for online bookings, 10% discount for repeat customers and 15% for schools and church's ( 4 unit minimum order) .

I have a 60%repeat customer return and I bet we have 40% of all the schools and church's in our area.

Our prices are alittle higher than most but the discount seals the deal most of the time. I will even give a free generator if it helps the sale. I actually bought a defender dome last month because a school said they would love our business because of our clean units but only one company in the area has the defender dome. .... not any more. .... and they booked with us (13 units total )..

My point is"seal the deal"... if that includes discount prices, free generators or bonus units, seal the deal. However, know your cut off point and stick to it like crazy glue. .. mine is 20% for 5 or more units. I gave away $1250 in discount last Friday but in return, I rented out almost every unit we had. Give out $1250 bring in $7200... I'll do that every day if I could.

Oh, 1 of the 2 schools just put in a repeat order for next year....
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#33 Dk-Rents

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Posted 18 May 2014 - 10:01 PM

I agree BounceAboutPartyRentals.



#34 PTBounce

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Posted 19 May 2014 - 08:40 PM

Our local SW the same problem with rock bottom prices.  280 for a 20ft slide all weekend.  

 

What a Maroon



#35 MWI

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Posted 19 May 2014 - 09:17 PM

Call the SpaceWalk operator in Cedar Rapids Iowa and see how he does it.  Somehow he comes into the ULTRA competitive market of Des Moines Iowa and drives 2 hours to do like 4-5 inflatables for less than anyone locally can do with a B.S. set-up.  Funny, I'm going to Cedar Rapids and charging top-dollar!!!  The lesson today:  Get greedy, make the established companies mad, and then see what happens! Good Luck!


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#36 AHB

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Posted 20 May 2014 - 06:13 PM

I don't know if you should be pigeonholing every space walk branch owner in general. We all have our own markets, strategies etc. In my area, rates are so low that companies rent out garbage equipment.. i mean covered in stains, tears, patches, making extra blower holes because two 2 HP blowers are not enough, etc.

 

With Space walk, I don't need to face that temptation because SW just keeps feeding me brand new units (and even if I ever did I know better than to do business that way). So I charge less so that I can get the customer for the first time, then they are so blown away by the fact that its a nice piece of equipment and not all haggard that they stay with me. But if my competitors weren't so haggard then this would not work, I would just be doing work for nothing. However, I've quickly developed a reputation and that is of value. To me charging less is not about being greedy, its about 1 upping on the level of quality, not price. But unfortunately for me right now, so many people do not even know that there is such a thing as a "shiny inflatable" that I have to win them on price first. It is what it is.

Seems like to me if you equipment is that much better, than you should be charging the same or a little more? What type of customers do you want? the Wal Mart, I want the cheapest, and I will be on "people of walmart .com or the Target customer, I will spend a little more for better quality and a better shopping experience. Two lessons I learned from seasoned vets on here. Being the cheapest sometimes your are perceived as inferior, lower quality in a lot of more affluent customer's eyes. Second, always easier to drop prices some than raise them when you started out as the cheapest.



#37 Rolling Thunder Games

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Posted 20 May 2014 - 07:39 PM

If a customer is looking to rent multiple items, I will gladly discount. How much of a discount will depend on what all they are getting, and what my overhead is. If I can't make a decent profit, then it isn't worth doing the event. I always tell my corporate people that if they share their budget with me, I can work with them to get the most bang for their buck. Knowing what they can afford, and knowing where they would like to keep it at; That tells me how many items I can rent to them, and how many games I can throw in to seal the deal.



#38 PTBounce

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Posted 21 May 2014 - 11:05 AM

Jeez

 

 

I don't know if you should be pigeonholing every space walk branch owner in general. We all have our own markets, strategies etc. In my area, rates are so low that companies rent out garbage equipment.. i mean covered in stains, tears, patches, making extra blower holes because two 2 HP blowers are not enough, etc.

 

With Space walk, I don't need to face that temptation because SW just keeps feeding me brand new units (and even if I ever did I know better than to do business that way). So I charge less so that I can get the customer for the first time, then they are so blown away by the fact that its a nice piece of equipment and not all haggard that they stay with me. But if my competitors weren't so haggard then this would not work, I would just be doing work for nothing. However, I've quickly developed a reputation and that is of value. To me charging less is not about being greedy, its about 1 upping on the level of quality, not price. But unfortunately for me right now, so many people do not even know that there is such a thing as a "shiny inflatable" that I have to win them on price first. It is what it is.

Seems like to me if you equipment is that much better, than you should be charging the same or a little more? What type of customers do you want? the Wal Mart, I want the cheapest, and I will be on "people of walmart .com or the Target customer, I will spend a little more for better quality and a better shopping experience. Two lessons I learned from seasoned vets on here. Being the cheapest sometimes your are perceived as inferior, lower quality in a lot of more affluent customer's eyes. Second, always easier to drop prices some than raise them when you started out as the cheapest.

 

Jeez, we've seen this all before.  The usual "I'm better than everyone else because I'm SW"

 

Tell you what, SWTRC, how about adding in a location?

 

Personally I, along with Bryce, offer a much better service than our local SW goon.  All SW customers see is the savings on the front end

 

They don't take into consideration:

1.  Driving time.  Round trip X 2.  (2 hours w/friend)

2.  Gas prices @ 3.58  (8 gallons) $28.64

3.  Set up time (1 hour w/friend)

4.  Take down (1+ hour w/friend)

 

I don't get it.  A customer isn't given a dolly.  They drag their own trailer or force into a truck bed.

 

A SW cheapo WalMart customer spends $110.00 to save $100.00.  4 hrs drive time @ $10.00/hour + labor @ $10.00/hour



#39 fulltime

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Posted 21 May 2014 - 01:09 PM

I think this may be one of there sites http://www.stluciebo...artyrental.com/

 

I had thought SW took 40% from rentals if that is the case, you are not making a good profit margin. 19 ft.Wipe out all day $220, you keep  $132 before costs. Assuming the 60-40 split isn't the other way around. Then you give your customers another way to save 10%.

 

Telling other operators how to price or run there business is something I don't like to do. Mathematically it doesn't seem you can be making a profit. Most markets that you can make money in are competitive.

 

Regarding quality and service if an operator doesn't supply both they won't get return or referral business. Cheap prices are not the road to creating wealth for you and yours. They are the road for the next guy delivering that same equipment. This I have seen in my market with SW a few times.



#40 CapitolOnlineAuctions

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Posted 21 May 2014 - 03:59 PM

SpaceWalkTRC,

You said "This means less wear and tear, less gas, and less employee wages which are my main 3 expenses"

Do you not have to pay rent or liability insurance?  

Since you are breaking down your expenses, isn't the SW fee 40-50%?  

I don't mean to be nosey, but since you were breaking down your expenses, I am curious, and i know many others on here have been curious to what the SW fees are.

It is a very interesting model that SW has.  






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