Pricing your tour or activity is critical to attracting the right audience and ensuring you are profitable in a highly competitive landscape. But having the best price isn’t necessarily the lowest price, it’s about understanding your customers, the competition, and the ups and downs of demand. This workshop dives into pricing strategies and key pricing techniques that will help you develop the best pricing for your tour or activity taking into account the competition, customers, fixed and variable costs, marketing, and distribution.
13. 13
The “common” business model of tour & activity providers
Profit/Loss = Revenue - Costs
Profit/Loss = {#SoldTickets x Price} - Costs
14. 14
The “common” business model of tour & activity providers
Profit/Loss = Revenue - Costs
Profit/Loss = {#SoldTickets x Price} - Costs
Not always predictable
or cost-intensive
marketing necessary
15. 15
The “common” business model of tour & activity providers
Profit/Loss = Revenue - Costs
Profit/Loss = {#SoldTickets x Price} - Costs
Not always predictable
or cost-intensive
marketing necessary
Mainly
fix-costs
16. 16
The “common” business model of tour & activity providers
Profit/Loss = Revenue - Costs
Profit/Loss = {#SoldTickets x Price} - Costs
Not always predictable
or cost-intensive
marketing necessary
Mainly
fix-costs
???
17. 17
The “common” business model of tours & activities providers
Profit/Loss = {#SoldTickets x Price} - Costs
Can you push your revenue through a
specific pricing strategy?
Profit/Loss = Revenue - Costs
23. 23
The average customer – the normal booking experience
Inspiration
Research Purchase
Anticipation
Loyality
24. 24
The average customer – the normal booking experience
Inspiration
Research Purchase
Anticipation
Loyality
Budget Irrational
Emotional
Price sensitive Price sensitive
25. 25
How can you maximize your profit with pricing strategies?
So what can we learn and
adopt from the other two
markets and the normal
booking experience?
32. 32
32
Anchor pricing is the tendency to
rely on the first price as “anchor”
during the booking process:
Premium Quad Tour: 89 €
Regular Quad Tour: 49 €
The lower priced regular tour
seems like good deal!
Set a price anchor!
35. 35
Higher incidental prices as anchor
Just showing – even to your
experience unrelated - higher
prices works as a higher anchor.
Show related experiences that
are more expensive.
Show any higher price!
38. 38
All that matters is what's before the comma!
We all know it from the
supermarket:
9,99 € or 9,95€
And it works since decades!
39. 39
All that matters is what's before the comma!
price
conversion
rate
Increase %
0.99 3.06%
1.18%
1 1.88%
2.99 3.44%
1.33%
3 2.11%
4.99 4.67%
0.83%
5 3.84%
5.99 1.56%
0.14%
6 1.42%
Source:http://blog.gumroad.com/post/64417917582/a-penny-saved-
psychological-pricing
We all know it from the
supermarket:
9,99 € or 9,95€
And it works since decades!
41. 41
Product vs. Price –
what to show first?
5
How to maximize your profit with pricing strategies
42. 42
Product vs. Price – what to show first?
Product
first
Price
first
= consumer decides
based on
quality
= consumer decides
based on
economic value
?
43. 43
Product vs. Price –
what to show first?
5
How to maximize your profit with pricing strategies
44. 44
From high to low
6
How to maximize your profit with pricing strategies
45. 45
Customers view on the relationship between price and quality
Price
Quality
Anchor Price
46. 46
From high to low
6
How to maximize your profit with pricing strategies
55. 55
Discounts de-value your brand!
But: Offer early bird pricing to encourage pre-purchase.
Competition
on quality
Competition
on price
Don‘t discount! Discount possible!
56. 56
Rule of 100
vs.% €
Price < 100 €,
e.g. 10% discount
Price > 100 €
e.g. 50€ discount
58. 58
How can you maximize your profit with pricing strategies?
1
Anchor Pricing2
Upselling
3
Higher incidental
prices
5
Product vs. Price –
what to show first?
4 Charm Pricing
6From high to low
7Offer a decoy
8Discounts
60. 60
… but what about the other 99.99%?
How can every tour &
activity provider become a
pricing strategy master?
61. 61
How can every provider become a pricing strategy master?
Use a professional booking system to optimize
your pricing and maximize your profit!
Software
Success