Price setting for tour operators requires a strong mix of marketing strategy and financial analysis. The people, accommodation and components that make up the experience/holiday you provide can be incredibly diverse and pricing strategies often evolve as a tour operator develops its brand and market share.
Companies with high churn typically spend vast amounts on marketing to try to replace their defectors. However, as it’s more cost-effective to win back lost customers than to garner new ones perhaps they should be using strategies aimed at getting “lost” customers to return. A study completed by Marketing Metrics says you normally have a 20 to 40% chance of winning back an ex-customer – so, how’s it done?
Subscription pricing is a business model where a customer must pay a subscription to have access to a product or service. The strategy was initially developed by magazines and newspapers, but the number of companies and websites using this model for their products and services is increasing exponentially.
Topics: Subscription Pricing
We've all become used to the idea of the price of an airline seat varying according to the season, day of the week and time of day. This is dynamic pricing in action. The “new kid on the block” however is the setting of the price of an airline ticket according to the attributes of the customer i.e. personalised pricing.
Almost half of the 65 million trips taken abroad each year by UK citizens are "package holidays" - where the consumer buys a complete package of accommodation, flight and connections for a single price. It’s a highly competitive market with a small number of large tour operators wrestling hard for market share.
Do you want to shake things up in your business? Perhaps you want to go a whole lot further and shake things up in your industry as a whole? Steady on there, first things first.
Topics: Pricing Techniques
The current retail environment is evolving rapidly with an increasing focus on machine learning and disruptive innovation so retailers seem destined to use artificial intelligence effectiveness to maintain and improve their share of the market.
The Internet gives consumers unprecedented power to quickly and easily compare prices and find the best promotions for the products they require. Online pricing transparency, therefore creates the need for brands to closely monitor prices across their categories and against their competitors.
It is a criminal offence for traders to deliberately make misleading price claims about their goods or services and against the letter of the law to make prices confusing to the consumer.
For example, 'was £120, now £99.99' is deceiving if the goods or services have never been presented at the higher price. It is also misleading/confusing if a trader fails to show 'hidden extras', or to make it clear when a price is conditional on, say, another purchase.
If you are not constantly reviewing and updating your prices you could be missing out.
Technology now allows businesses to change prices frequently, minute-by-minute if required. Amazon and Expedia update their prices several times a day and consumers are becoming increasingly accustomed to this state of affairs everywhere they shop – so, if it works for these "big players", what's stopping you from making frequent price changes?