
Originally Posted by
LowCostNoFrills
Wow, how do I explain this briefly? Easiest to use the airlines as an example as it's most apparent. But, this has been applied in part or whole to a huge variety of industries.
1. A company determines what their customers are really coming to them for. For airlines it's timely, safe transportation.
2. You strip out anything you're providing that is not essential to what you came up with as an answer for #1. Like (crappy) meals. You may decide to offer this service, but at an additional cost so only those who want it get it.
3. You automate & reduce costs as much as possible. Ex:etickets (average savings of $10 per ticket for the airlines), kiosk check-in (to reduce amount of necessary staff).
4. You educate your customer to help themselves (on-line booking) and about what to expect so that their expectations are met and they are satisfied.
5. Because of 1 - 4 you offer a lower price than traditional to your industry.
Lots of additional details and business geek items, but that's the nutshell.
Any questions or comments?