Healthy Competition

Last week I visited our local soft play area with my youngest daughter and her best friend.  This is not our usual haunt as we usually meet with a group of friends at another soft play centre 7 miles away and after my latest visit to our local I remember why.

 

 

Not wanting to bore you with the details but it was, in my opinion, over-priced and showing a few too many signs of wear and tear.   It used to be a lovely centre which, as I recall, was reasonable value for money but it would seem that those days are gone as they look for every opportunity to squeeze more money out of the customers coming through the door.

The falling standards and rising prices annoyed me somewhat which seems a little unreasonable when no-one forced me in there, it was my choice and I could have chosen to drive to our usual centre with two toddlers had I felt strongly enough.  But it was too far to go and so I paid the money and accepted the service being offered. 

And therein lies the problem with a lack of competition.  Why would our local centre charge a lower price or choose to invest in their equipment if they don’t need to?  They are safe in the knowledge that their nearest rival is a good car ride away providing something of a captive audience.  Surely it’s just good business sense to maximise profits by charging the highest price and keeping costs to a minimum.   After all, this is a business not a charity.

But, what if a new centre was to open just around the corner?  Suddenly there would be a need for innovation in order to stay in the game.  If you lose your unique selling point (in this case being the only supplier in the area) then you need to find a new one in order to hold onto market share.  So what will it be?  Customer loyalty won’t be enough, particularly if you’ve been ripping people off for years.  So you’re looking at falling profits as you slash prices and plough investment into your product to appeal to the customers who once had no choice.

This is great news for customers who now get much more for their pound, but maybe a warning to the supplier not to become too complacent while enjoying their monopoly position.  After all, nothing is forever.   This could be a lesson for anyone who runs a business to make sure that there are contingency plans in place for every eventuality including the entry of new competition into the market.

So then, in my humble parental opinion every town should have a soft play centre – they are brilliant places.  But maybe, in the interests of innovation and customer experience every town needs two.