Numerous publications have had articles on the bankruptcy of Red Lobster. They were/are one of America’s oldest casual-dining chain, with over 600 locations.
Reading about their recent strategy in the Wall Street Journal I came to the immediate conclusion:
It doesn’t pay to compete on price.
To build traffic they did a $25 all-you-can-eat shrimp promotion. The Journal led with a story of a diner who ate 64 shrimp. Not exactly a profit builder, was it?
Recently I said to a business friend I was down on certain types of client projects. He sounded like me when he said, “Charge them more to make it worth it.”
As always, we all need to compete on quality, service, integrity as the combination provides value. A great product, service or advice at a high cost is much, much better than mediocre advice at a low price.