One of the easiest ways to grow sales or increase profitability is to adapt your prices while keeping the expectations of your target customer in mind. The average Joe has been taught to be a deal seeker as they have easy access to the various distribution channels that hospitality establishments use to entice business. Pricing is both an art and a science, and only the most strategic players reap the benefits.
Pricing your product comes down to understanding VALUE and what consumers are WILLING to pay.
Here’s the secret: Better pricing is not always about offering the lowest price. The focus should be on value – what sets you apart from your competitors in terms of location, service, style, brand or quality?
A potential customer is not looking for the best price, but rather the best price-value equation. As the economic formula states – Value = Experience / Price.
Therefore the best way to get noticed in the market is to offer a better experience, not necessarily a lower price. Ideally being competitive is not price driven but product driven.
Many business consultants advise “putting yourself in your customer’s shoes”, to test your product or customer service levels. The tourism industry is the one place where this is quite easy to do, since we all go away on holiday now and then (or try to!).
On planning a ski trip to Argentina last year, I was interested to find myself on the other side of the internet research and online booking process. I started by asking friends who had been there about their experience and recommendations. Then I read as much as I could online, finding good information from local and regional tourism sites, as well as commercial sites specifically promoting skiing. Once I had more of an idea about regions and what the operators offered, I started looking at available accommodation on several different web sites to compare prices.
When I had the names of the properties I was interested in, I went to TripAdvisor to see what people who had been there already had to say. And yes – what I read there often changed my mind.
Finally, I booked online. Where the property had a good web site and online booking system that made it easy to book directly on their own site, I did that. In other instances I booked on Booking.com, since I knew the brand name and had used them in the past with success. For the actual ski passes and transfers I used a South African travel agent who advertised herself as an expert on Argentina, since it was much easier to deal with her than a Spanish-speaking operator.
What lessons did I learn?