What is a Beat/Meet/Lose (BML)?
Beat/Meet/Lose (BML) pricing model is a strategic approach that involves setting your prices in relation to those of your competitors, with the goal of either beating, meeting, or losing their prices.
Overview of Beat/Meet/Lose (BML)
1. Beat: When a travel company opts to “beat” competitor prices, it sets its rates lower than those offered by competitors. This aggressive pricing strategy can be particularly effective in attracting price-sensitive customers who are actively comparing options. By positioning itself as the more cost-effective choice, a travel company can increase its market share and drive higher booking volumes. However, this approach requires careful consideration of profit margins and operational costs to ensure long-term sustainability.
2. Meet: The “meet” strategy involves aligning your prices with those of your competitors. This approach is often used to maintain competitive parity and avoid price wars. By matching competitor prices, travel companies can ensure they are not perceived as overpriced, while focusing on differentiating themselves through other value propositions, such as superior customer service, unique travel experiences, or exclusive offers. This strategy helps in maintaining a balanced market presence without compromising profitability.
3. Lose: In contrast, the “lose” strategy involves intentionally setting prices higher than competitors. While this might seem counterintuitive, it can be strategically advantageous for positioning a brand as a premium or luxury option. For instance, if a travel company offers high-end, exclusive travel packages with exceptional service, it might justify a higher price point. This approach can attract customers who are less price-sensitive and more focused on quality and exclusivity.
For travel companies, employing the Beat/Meet/Lose (BML) pricing strategy requires a deep understanding of market dynamics, customer behavior, and competitor activities. It’s essential to continuously monitor these factors and adjust pricing strategies accordingly to maintain a competitive edge. Additionally, integrating technology and data analytics can enhance the effectiveness of BML strategies by providing real-time insights into pricing trends and customer preferences.
Conclusion
The Beat/Meet/Lose model offers travel companies a framework for competitive pricing that can help them navigate the complex landscape of the travel industry. By choosing the right strategy, companies can better align their pricing with their business objectives and customer expectations, ultimately driving growth and success in a competitive market.