Are you proud of your prices?
Let's talk about money.
Oh sorry, we don't do that do we?
We might utter vague grumbles about the price of things, but discuss our profitability and revenue? No, we don't do that.
I'm not sure why. After all, most of us are in business to make money. I wrote about this a while ago here.
With escalating energy and food bills, you might be thinking about increasing your prices. There are some tips about this in a blog post I wrote last year. Some of you may be struggling to attract visitors and wondering if you should discount. If you are, please do read this first.
Whatever you're thinking about prices, I'd like to ask you an important question:
Are you proud of your prices?
This morning I was reminded of an experience I had many years ago.
At the time I was working for an incoming tour operator and looking for accommodation for some wealthy overseas' clients. The sales manager from the Savoy Hotel in London came to see me. She showed me photo after photo of the most opulent beautiful rooms, sang the praises of the restaurant and talked about their incredible service. It sounded truly wonderful and perfect for my guests.
I asked the price.
She hesitated for a moment then said, 'Er, um, well, the cheapest room is £x'.
It was obvious that she was very uncomfortable with the pricing. She loved the hotel, and could totally understand why someone would want to stay there.
But she didn't think the price was worth it. Even the cheapest room.
When she talked about the price, she wasn't thinking about the investment in those rooms, the staff training, the high cost of running the hotel, its reputation, exceptional location, or rich history of making many people very happy.
She was thinking about her salary, her living costs, and how she couldn't possibly afford that room herself. She obviously had other priorities and pressures, and wouldn't want to spend her own money staying at the Savoy. That's totally understandable.
But what she had forgotten, was that she wasn't the target market. She was judging the prices by her own standards, forgetting that not everyone is in the same financial situation as her.
I wasn't earning much more than the Savoy Hotel sales manager, but I thought the price she quoted was a bargain.
I saw the hotel through the eyes of my wealthy clients, people who were constantly looking for wait-till-I-tell-the-folks-back-home-about-this experiences. They actively wanted to spend their money.
The Savoy Hotel sales manager did a great sales job, really selling the benefits of the hotel. When I asked the price I was expecting a higher price.
I booked the Savoy for my clients, but not at that price.
I booked superior rooms at a significantly higher price. Because those clients expected to pay more and were ready to do so.
You might be wondering how this relates to visitors at a difficult time, when we're going into recession and there are increased pressures on budgets.
I'd like to make two points.
Not every one has the same income as you. Some have more, some have less. Not every one has the same priorities. Some want to spend their money on travel and experiences. Some don't. Some people will really struggle through the recession. Some won't.
Your business success will depend on offering the right experience at the right time to the right people at the right price.
My second point relates to the 'right price'. Our job is to convince people that the price we charge is the right price for the service we offer.
When we talk about our prices, or display them on a website, we need to be confident and to show the value of what we offer.
Most of us are proud of what we do.
We need to be proud of our prices too.
Start by jotting down all the brilliant things you do, why what you offer is good and how it's different, special or better. Think about how you can help visitors feel better.
Make sure you really use every opportunity to convey those points, and then confidently state your prices. Be proud of the value you offer, and you'll convey that confidence to visitors. Despite the recession many people are still looking for ways to spend their money and to enjoy life. You just need to show them how you can help.
If you start with the price, then explain what you do, you'll focus minds on your prices, and then it can be harder to justify what you charge.
Wow someone with your incredible value and great experience, and then they might even be ready to pay more than you expect.