To overshoot, undershoot or stay in the middle
Although it happens everywhere and anywhere in our everyday lives, Most of us have probably never heard of the concept of “Overshooting and Undershooting”. Whenever we buy products and services, we overshoot, undershoot or prefer to stay in the middle. We all do it, and even when we don’t, we see it happening and yet... we’ve never really put a finger to it. What then is this concept?
Let’s illustrate this with an example. Say you wish to fly from Dubai airport, which is a major international ‘hub’, to a popular European city. You now have several choices available. Not only do you have a wide choice of carriers but you can also select numerous levels of service.
The average ‘Joe’ amongst the majority of us folks would opt to take the middle of the road; which would be an economically priced airline ticket that includes a reasonably comfortable seat and a decent meal served on board.
Then, there are those who overshoot by spending big bucks to fly in 1st class – seated in plush, wide, lie-flat seats and be fed with lobster and champagne because they crave pampering and can afford it. These are customers who desire the more expensive things in life and are willing to pay for it – be it a stay in an exclusively fashionable boutique hotel or the best suite in a luxury hotel.
Middle of the road customers too can sometimes overshoot – for example, by shifting from an airline that despite meeting seat, meal and price expectations is deemed unreliable. This shift, even if it means paying more, is driven by necessity rather than pleasure – where getting to the end destination on time is crucial.
This leaves us with the third type of customers – those who undershoot. They are the ones who seek basic solutions at the lowest price. All they want is to fly from A to B, even if it has more than two connections, at the lowest airfare and are willing to wait for such opportunities. They don’t mind sitting in cramped seats and spending long hours in transit. These are travellers who are happy with a minimum safety and comfort threshold in a hospitality solution. They are mainly concerned about price - one reason as to why customers find Airbnb so appealing and valued more than some hotels.
On the hotels’ side, overshooting on rates whilst undershooting with staff can do serious damage to reputation. The article ‘Hoteliers - do not ‘overshoot’ rates for ‘Staycations’, which we ran a few weeks earlier best describes the challenges faced.
In today’s COVID shrouded environment, the ability to rationalize value is predominantly a function of available resources. Unless done carefully, the consequences of overshooting or undershooting can only be learned after the fact.
Shafeek Wahab – Editor, Hospitality Sri Lanka, Consultant, Trainer, Ex-hotelier.
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