Download to read offline
Uploaded byBecky McCray
Charge premium prices and visitors will thank you
Becky McCray emphasizes that businesses can charge premium prices by effectively telling their stories and engaging with customers through online tools and social media. She outlines a pricing formula that combines various factors such as economics, marketing, and psychology. Additionally, the document advocates for building relationships and community engagement to enhance customer loyalty and willingness to pay more.
More Related Content
Similar to Charge premium prices and visitors will thank you
Charge premium prices and visitors will thank you
- 1. Charge Premium Prices AndYour Visitors Will Thank You Becky McCray
- 2. Doing good sellsbetter at premium prices You tell the story by layering Online tools are perfect for layering
- 3. Trends in ourfavor in 2012 Local Strong rural movement economy Mobile and location-based Travel social networks
- 4. Customers will paymore to do good
- 5. The simple formulafor pricing Pricing = economics + marketing + psychology + alignment + timing + luck + demographics • Glenn Freedman
- 7.
- 8. Bottineau PRIDE = Renewal Ice Cream Parlor = Experience Ice Cream = Asset Fluid Milk = Commodity Photos source: Pride Dairy Facebook Page.
- 9. Use Social Mediato Build Engagement • Connect with your cause Renewal • Explain the purpose • Tell stories in audio and video • Blog guests’ stories Experience • Post their photos, videos • Build relationships • List of amenities Asset • Social network activity • Basic website Commodity • Social network accounts
- 10. Layering Know Like Trust Buy Refer
- 11.
- 12.
- 13. Doing good sellsbetter at premium prices You tell the story by layering Online tools are perfect for layering
- 14. How to actlike a small town business If you want to succeed.
- 15. How to actlike a small town business If you want to succeed.
- 16. How to actlike a small town business If you want to succeed.
- 17.
Editor's Notes
- #2 2 minutesHow many of you got into this business to get rich? Money still matters, and it lets you do more of what you love. Our goal today is to get you more money out of the work you already do. The challenge for all of you is to build those kind of rich relationships that draw people into visiting, while you still take care of all the other things you have to do. The good news is that you have access to tools to build relationships in a way that was never possible before. It’s nearly impossible to build a real relationship from a quarter page ad, even if you could afford to place one in every newspaper and travel magazine. But it is amazing what you can accomplish with just 140 characters in an individual Tweet, or a few photos on Facebook. So let’s take a look at all these trends that are converging, and how revitalization and heritage tourism stand to benefit.
- #3 Here’s how we are going to do it.
- #4 5-7 minutesLocal movement: Local food, local travel, shop local. Local foods make up 5 of 20 top food trends in 2012 in the National Restaurant Association survey of chefs. Rural economy:The Rural Mainstreet Index is at record levels, carried up by strong agricultural markets. That is also supporting a positive outlook for more rural jobs. One worry is the recent run up in farmland prices in many areas. No one wants to see yet another real estate bubble burst, dragging down the rural economy. For now though, rural entrepreneurs have a better economic climate than many of their urban counterparts.Social Networks: Mobile = Local. Most of us are carrying smart phones, playing location based games, and are living in Facebook even while out of the house. Visitors and travelers are using Google Local to find businesses in even the smallest of towns. Travelers and locals review small town businesses on sites like Yelp and Urban Spoon. All of this is happening now. Smart local businesses are taking advantage of this. Mobile-friendly information and QR Codes will pop up, even in remote locations.Location was the big trend in 2011. Location alone, though, is not enough. It also matters what you are doing. So we're seeing new connections formed around shared activities regardless of location. GetGlue is starting it with check-ins for content, like movies or music. (Like watching a movie with a friend, even if you're miles apart.) I expect this trend to bloom with more active experiences, like biking, etc. This has huge potential to reach out beyond geographic boundaries, as people form tight knit communities around their favorite active experiences.Travel:Travel is up, expected to hit record levels this year. As gas prices increase, We’re seeing more short getaway trips, more travel by car, more last minute trips, and more family time. U.S. Tour Operators Association members are optimistic about growth in travel this year, with some predicting a boom year with 10% increases. TRANSITION: With those trends driving society, the economy, technology and resources, there’s another major trend in consumer spending, one with big implications for how Main Streets and heritage tourism businesses engage with visitors.
- #5 3-5 minutesIt’s the desire of people to be part of doing something good, even when they travel. And the trend is that they will spend more to reach that. Now, we’ve suspected this for a long time, but a number of studies over the past five years have added up to confirmation. Eco tourism and green: 2/3 of people said they will pay over 10% premium for green products, in an Accenture study. http://www.environmentalleader.com/2007/10/18/two-thirds-of-people-will-pay-premium-for-green-products/40% of travelers said they will pay 8.5% extra on sustainable tourism, and a University of Massachusetts study looked at how travelers keep up their eco choices when traveling, and tried to reconcile the conflict of what people say they will do, and what they will actually pay. It’s starting to look like people really will invest in green while traveling. http://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1148&context=gradconf_hospitalityFair trade: The premium for fair trade is especially true of affluent buyers, And… more true for “visible” purchases. An experiment in an affluent New York store showed that sales actually went up when Fair Trade labels were clearly visible. And the increase in sales was more on those purchases that were for a gift than for their own use, presumably because the fair trade label was seen to add value on purchases others would see. And it went on: when the price was raised on the Fair Trade items, sales actually went up again, as people were gladly spending more to support the good cause. http://consumerist.com/2007/10/study-shows-shoppers-will-pay-more-than-necessary-for-fair-trade-goods.htmlShop local: An Ohio State University study observed that people shopping for local foods were knowingly spending almost twice as much for local produce as for the usual trucked-in produce. http://researchnews.osu.edu/archive/locfood.htmI found a new study from Penn State. Restaurant customers prefer to purchase meals made with local ingredients when they are priced slightly higher than those with non-local ingredients. http://www.sciencedaily.com/releases/2010/10/101026111733.htmHeritage Tourism:The Texas state guidebook for Heritage Tourism says that heritage travelers “spent more on shopping, entertainment and dining than all other types of tourists. They stayed longer, were more likely to pay for lodging and came back more often than any other type of tourist.”http://www.thc.state.tx.us/publications/booklets/HTGuidebook.pdfRevitalizationdefinitely has a claim on many types of doing good: green, local, heritage. But there isn’t one single logo to get all of that across, and that’s probably a good thing. Because it forces you to tell the story of how you’re doing good. You have to layer information and build relationship, if you want your guests to pay a premium for your experience and the good you are doing. So, how does this work into our pricing model?
- #6 I got this simple formula for pricing from Glenn Freedman, when he was director of the Oklahoma State University Center for Innovation and Economic Development. In my experience, pricing is the most confusing and obscure art form related to business. Let’s look at a pricing and value model and how we can get guests to pay more.
- #7 1 minuteThere is a well-known scale of value pricing in business, building from commodity to experience. This model has been circulating for years. The standard example is coffee, and it goes like this: -Commodity coffee beans are worth 10 cents a cup. -Convert it to an amenity, brewed coffee, and it’s up to $1.50 a cup. -For an experience, put it in Starbucks, it's up to $4. And you even stand in line, and adopt a new vocabulary to get that experience. -At the top level, you pay the premium for the Fair Trade beans, because you want to make a difference with your purchase. We’re going to build on that model for your business.
- #8 3 minutesCommodity: Generic. Low value, easy, quick. “Great place to visit.”Asset: Common. First step in value add, not that hard. “Enjoy wide open spaces.”Experience: Participating. Requires effort, high value, worth talking about. What the visitor gains. “Be part of a working ranch.” “Get lost in our corn maze.” Renewal: Doing Good. Investment, hard, very high value, requires layering of information. What you do for the world. You can’t summarize it in one bullet point, or one headline. You can hint at it: “Keep the cowboy way of life alive.” “Introduce the next generation to your pioneer roots.” But you still have to tell a deeper story. Let’s look at an example small town business that built engagement in order to be more profitable.
- #9 3 minutesPride Dairy is a cooperative of local dairy producers in Bottineau, North Dakota. It’s been around for a long, long time. My grandparents, and probably your grandparents, belonged to a similar local cooperative way back 50 years ago, but those are all gone. Pride Dairy managed to stay around, to keep going with a reputation for quality milk and ice cream, and lots of local connections. When Wal-Mart moved in, the cooperative manager realized that fluid milk was no longer a winning product. While Wal-Mart contracted to sell milk from Pride Dairy, of course the cooperative made less on every gallon. So the cooperative started looking at moving up the ladder of engagement, and they started to focus on experiences. They reopened their ice cream parlor that has been closed since 1959, the Dairy Dipper. They’re adding more products made from local ingredients, like syrups made from local Juneberries. But the real magic is explaining how they are the only remaining dairy cooperative in North Dakota making their own ice cream, and certainly the only place you can sit down for a dish of ice cream made from local dairies. It’s sharing the story of how they hire locals to go out and pick wild berries by hand. They really do announce on the radio that it’s juneberry season and they are buying. Local kids earn pocket money by picking berries to sell to Pride Dairy. It’s a great story, and it draws people in from all over. But you can’t tell that whole story on the lid of the ice cream. The only place you get enough time and room to share your story in detail like this is either face to face, or online.
- #10 2 Minutes Let’s walk through this same scale of engagement with social media tools. At the commodity level, you have a basic website with accurate, up to date information. You also have accounts and basic information at the main social networks. I hate to say this, but that is the basic commodity level now. Probably most of you have that, but that’s the minimum customers expect. To move up to the asset level, you need to include the list of amenities that make you special. And you need to actually be active on those social networks, though at this level, you might just be broadcasting without really listening. I don’t recommend that, though. To reach the experience level, you are focused on what the customers will gain. You can share stories from your guests, share their photos and videos. In the social networks, you have to move from only broadcasting to also listening and answering – building relationships. If you want to reach up to that most profitable level, renewal, it’s time to truly connect people with your cause. That involves true conversation, sharing the higher purpose of your operation. Using audio and video is a great way to kick start these conversations. That puts the tools into the continuum. The challenge is to convey all the information you need to, to your customers.
- #11 6 minutesThe ProcessLayering is the process of giving info in small chunks. Rather than overwhelm a prospect with the whole story and every detail, break it into bite-size pieces. You want to offer just what they want to know right now. Later, they will come back with more questions.Think of it like painting or varnishing. You get better results with lots of thin layers instead of one thick coat.Now, more of this happens online. One of my clients sells African hunting safaris. He uses a website with many layers of information, all designed to build a better relationship with people half a world away from him. The site includes photos of happy, successful clients. Next, many clients have shared a short testimonial of a few sentences. Then, some have shared longer, but exciting stories from their trips. He also tells a bit about himself, in first person. His full contact information, including personal email, home phone and mobile phone number are included on every single page. This all adds layers of information for his prospective clients, and encourages people to visit his website repeatedly as they explore all the layers.The MindsetLayering is not just a process, it is also a mindset. If you think in terms of layering information, you will be more likely to give people time to think about what they've just learned. It also gives you perspective on people's reactions, especially only. You will be less likely to be disappointed when you don't get an instant commitment. You know that you have added another layer, and that is valuable even without an immediate sale. Just don't carry this so far that you never ask for the sale, or never try to close. Like most other skills, it requires a balance.Another benefit of this mindset is a tolerance for repetition. When someone asks similar questions, or doesn't remember something you told them earlier, think to yourself that this is all part of layering. Sometimes you have to go back and fill in gaps. It also means repeating important information on your website over and over. RelationshipsLayering helps to keep relationships alive. Robert Middleton, at The More Clients Blog, explores this as part of the relationship pipeline.The sales funnel is the process of moving unknown prospects - those who might do business with you someday - into paying clients. You’ll see it labeled as Know – Like – Trust because your potential customers have to get to know you first, then come to like you, finally reach a point where they trust you, and then they can consider buying from you. The first part of all this now happens online, before you ever hear from them. Relationship marketing is the means of making this happen. Prospects don't travel through this pipeline without your focused efforts to cultivate, inform, and follow up until they are ready to do business with you. In other words, keep layering information while you build a relationship. When you talk with a customer, remember to add a new layer to their understanding. If they walk off without closing the deal, remember that you have added another layer. You may need a few more layers to finish, but it's all part of the process and the mindset.This is perfectly suited to how people create content online, and how they want to learn about you online.
- #12 2 minutesSome people are super-sharers. They create content online as a matter of their everyday life. When one of these people visits your business, you can end up with layers and layers of online content. Before I ever arrive, I probably wrote about you, where I am going and what my plans were, maybe even shared on services like TripIt or Plancast. When I first arrive, I may check in on Foursquare. Throughout my stay, I am sending status updates and pictures to Twitter and Facebook and Instagram. I might even stream live video, depending on your connection speed. Once I’m home, I’ll be uploading photos to Picasa or Flickr, videos to YouTube or Vimeo, and writing posts on my blog, Tumblr or Posterous. I’ll share links to that content on Facebook and Twitter, through Delicious and StumbleUpon. And I’ll put up reviews of your place on Yelp and Google Places. This is the most amazing and practical application of layering possible. You may think this is just because I’m a crazy geek or nerd. But I think this is like those photos slideshows my grandparents used to make years ago. And more and more of this is becoming mainstream, a bit at a time. If you haven’t had a geek like me visit your business, you will have soon. And this is becoming part of everyone’s world.
- #13 1 minuteHere’s an example of a agritourism company that is actively doing a lot of terrific outreach online. Frog Hollow Farm in California has an excellent website of their own. They reach out with outposts on Twitter and Facebook, where they are actually connecting with customers and holding real conversations. They are also featuring their positive reviews from Yelp and making use of Google Maps to share their location. Each of these is another layer of information for the potential customers, another chance to help them see how you are doing good in the world, and why you are worth a premium.
- #14 All of you are doing important work. You are making a difference by keeping alive our heritage and traditions, and you’re making people happy at the same time. Your guests want to know that. They want to pay you a premium price for it. To get all that information to your customers, you have to layer it. Lots of thin layers of information help them get to know, like and trust you. One thick layer of everything at once is just too much. Online tools let you layer that information. You can do part of it, and you can encourage your guests to do part of it, too. Right now, I can take just a few questions about moving up the value chain. We’ll save the last 5 minutes to wrap up with why you have a big advantage online.