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What if you find a way to give a quality product cheaper than the next guy
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It depends on how the cheaper product is created. Done by cutting overhead costs, costs of doing business, etc., by all means go for it. Done by cutting your own income (i.e. I now make $10/hr instead of $15/hr just to make it cheaper for students), bad. Again, other CFIs will find out how the cheaper price is created, it is inevitable. Secrets are not kept at an airport.
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We may be splitting hairs here!!
So, you're saying that if I can offer a cheaper trainng package by cutting my rates by 10%, I'm cutting my own income. OK, let's go with that.
Now let's say I'm a freelancer, and I keep my rates the same, but find a cheaper way to negotiate my aircraft rental rates. Or, let's say I own my own aircraft and charge for aircraft rental at cost. Would I still kicked kicked and chaired??
I agree that flight instructors should be paid for their time. I think that we should be compensated well, and that our time is worth every dime. However, I think that it's important that flight instructors learn to be effective business operators. Without that, you're going to lose business.
As a freelance instructor (presently), I've negotiated a way to make everybody happy. With access to an aircraft that I've negotiated at a very good rate, I can undercut anybody in the region by at least 30%. I still give a good product, and I treat my clientele well. Obviously, this makes some people very angry. Does this make me an enemy of those around me? Am I lowering the value of my profession? I think not.
I'm not willing to work for peanuts. But if I offer a student that has spent $1000 for my services $25 dollars off in the future, I think that I'll continue to make everyone happy...