We all know the basic principles involved in this economic formula and how it affects price. I was recently exposed to a piece of this equation that I had not experienced before.
Last week I returned from a business trip from Phoenix with a stop in Atlanta with a lot of thunderstorms in the area. When I walked into the terminal I knew there were major problems because there were twice as many people there as should be this late in the day.
After checking the departing flight board three times my flight to Birmingham had been delayed to 11:45 p.m. which translated to me that it would probably be canceled. So I decided with seemingly thousands of other people to go and rent a car to drive instead.
It was obvious that demand was out the roof by the number of people trying to get cars. When I finally got mine the rate was extremely high for a compact with no room for negotiation. I wrote if off to supply and demand economics.
When I entered the Hertz lot I was shocked to see hundreds of available cars on the lot. I had experienced for the first time that at least I was aware of the economics of high demand and high supply.
When any company takes advantage of a high demand situation by artificially driving up prices they are digging their own graves. One day the pendulum will swing and the demand will be low and everyone will remember the day Hertz placed greed above customer service.
Charge a reasonable price with world class service and your organization will be able to weather any storm and thrive when others are failing all around you. If you want people to stick with you during your hard times you had better treat them well when they are in the midst of theirs.