Pricing
I’m taken by the complexity of pricing and how so many high-end hotel and resort properties and airlines now “nickel-and-dime” rather than make it easy to invest in an experience. And make no mistake — it is an investment!
This past weekend, knee-deep in planning our annual family ‘gift of experience,’ I could not believe the stories about how businesses are charging these days and saw first-hand the swing in pricing as we began to put some itineraries together.
Airlines and all their extras are a nightmare to deal with. I get they think it’s easier to let people pick and choose their menu of options but frankly the days of inclusive pricing were sooo much easier. And it’s not like baseline ticket costs are any less. Inflation anyone? Some airlines won’t even let you buy certain categories of seats through a travel agent. They can book you so far and then you have to go online and buy the higher ticket directly. Ridiculous.
Checked into a property in Santa Barbara recently and there was a city tax, municipal tax, county tax, resort fee, parking fee and by the time you plunk down that credit card the nightly rate is 30% more.
In evaluating properties for this year’s vacay — god bless TripAdvisor — complaints on one property about all the hidden fees popped out in review after review. Scan 20 reviews and suddenly the pattern emerges, if AI isn’t there summarizing for you. Expensive restaurants, costs for ‘activities’ etc. If you wanted to tour the Christmas lights on property last month — Fee. Fee Fee. No thank you — we passed on staying there.
My son, helping out by identifying two resorts — one in Ashville. We were thinking about donating family time to a food bank and also contributing to the local economy after last year’s hurricane and none of our clan of 11 had been there — a criteria for where we choose to go each year.
But we read the reviews for some of the key hotels there — fees, fees, fees.
At some point are hotels going to charge for down pillows vs faux or start charging for the toiletries or extra towels. It’s crazy making. Resort-fees are bad enough especially when you don’t use any of the amenities!
I loved the time we went to Brush Creek Ranch — all inclusive. We had a fee for each room. Once we stepped onto the property, we never paid another penny. Not for food, alcohol, archery, paintballing, horseback riding, hiking shoes, or s’mores. It was SO easy and they had so many fun things to do on offer. Pricing bliss. We still talk about that vacation!
I wonder why more businesses can’t be easier to do business with. They think the bevy of choices makes it easier — but all it does is rack up prices under the auspices of personalization. How about letting us personalize and giving us a set price. It can be done.
What does this have to do with information? First how blessed we are to have the wisdom of crowds warn us about resort A or resort B and their gluttonous practices. Planning a holiday these days is so much easier given all the information and reservation capabilities that are at our fingertips.
And why does our industry make pricing so complex? I remember when the financial information firm IDC had a fixed fee and no contracts — they ended up having continuous revenue by virtue of extreme loyalty and an ability to opt out at any time — no strings attached. Their loyalty built on itself and they had the bliss of recurring revenue without any of the headaches. The price of a Bloomberg terminal also straight forward — it goes up each year a set amount and whatever feature/functionality/content added is included. Ditto the next year and the next. You know what you’re going to pay, can budget easily, and manage.
Some places, Forrester at one time, had a list of services, a number of users, and you could add in either direction of the pricing ‘matrix’. Add segments and it’s X price. Add users and it’s Y price. Frankly I love all you can eat because people are going to use what they use and why get in the way of that. I’m all for pricing based on segments but not firewalling them off. Friction — aka speed bumps on the information highway of life is not fun.
As we think about our own platform activities, I’m not sure I want to mirror ‘industry practice’ because so many of those practices are just dumb. How it’s done in SaaS firms is not a harbinger of confidence. Most SaaS software firms are awful at how they package and sell; I wrote about Software as a Disservice (SaaD) for a reason last year. Our partner, awesome trainer Christine Rogers coaches SaaS sales teams for a reason. Many are awful. What they sell and how they sell including pricing is a nightmare. Feature feature feature. Ugh.
So, with that April trip top of mind and how our industry does what it does I have to ask:
Do you have a favorite way you price? A vendor you work with that stands out in a great way. Suggestions about how you’d like to see us price as we go deeper into segment coverage. Please let me know or reach me on LinkedIn.
I’m all ears for the companies in our industry who get it right and will spread the word.