“It’s Got Nothing To Do With Price”
There is a very useful saying about the man who knows the price of everything and the value of nothing.
Today, that sentiment is especially true.
If you are engaged or engaging in a “It’s all about price strategy” can I gently suggest you close the door, turn off the lights and hang the ‘Shut for Business’ sign outside?
It has nothing to do with price. It has everything to do with value.
The two must not been confused.
In the hotel business, I hear 2 common cries. The first? You guessed it “It’s all about price”
The second “Our business is for everyone”
Both are strategies that will take you fast, furiously and deep into the darkest recesses.
So what is ‘value’? In my thinking, it is simply a price I am happy to pay for what I got.
Discounting is a bad deal for both the buyer and the seller. Neither end up with a benefit. One loses margin, the other simply gets a mental victory.
There are two solutions.
First, you must understand the drivers and why people buy. These are emotional need states. It might be a first date, a funeral, my Dad’s 80th birthday, my Mum’s anniversary. The list goes on.
What I need determines what I buy. What I buy has to fulfill my need. Great sales match both.
Second, you are not, nor will you ever be for ‘everyone’. You need more of who like you and less of the bargain hunters. That comes down to a few really important questions such as:
-What do you offer?
-What do you have that makes you different?
-What makes you unique?
-What is the personality of your business?
Your answers ought to begin with “Because….”
If you know who you are targeting your marketing needs to talk to your fans. If you are a 4 star Hotel entertaining the discount conversation with the B & B client you are wasting time, energy and fuel.
Instead, you need to be talking to lovers of 4 star hotels and asking B & B lovers to gently pass by.
Next, your marketing, once you know I like 4 star hotels, needs to talk to me, communicate me and inspire me.
Does it? Do you? Don’t be surprised if you fail if you don’t.
Lastly, create a list of high impact tradables rather than discount.
At a recent Ideas Factory we ran I remember a very simple example.
The aggressive client wanted discount. The hotel were about to cave in. A young manager bright eyed and bushy tailed intervened. He said;
“Sir, if I give you £20 off you don’t actually get anything. Instead, I’ll charge you the £100 but it is my pleasure to give you the golf buggy – normally £50 a day – with my compliments”
That’s what I mean about high impact tradables.
Much better use of your time to go make a list of high impact low cost things you can do to make sure everyone wins, benefits and stays happy.
That’s why it has nothing to do with price and everything to do with value.