Pricing basics
This Pricing basics Info Guide tells you why it pays to know your product, target customers, competitors and costs when making pricing decisions.
Prices vary depending on the type of product offered.
Remember!
Your customers are seeking the most memorable experience that they can get for the price that they are prepared to pay.
You need to constantly reinvent your product offering, eg, by making tweaks to appeal to your preferred target market, in order to encourage repeat visits and to survive. If you deliver a high-quality tailored product, you can charge more than if you are just focused on value for money.
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In order to make competitive pricing decisions that will lead to improved profits, you need to know your target customers:
Customer experience
To provide a satisfactory customer experience, consider the following:
What will make your activity more appealing?
Customer needs and requirements
- Offer a complete packaged experience – combine one or more products, eg an adventure holiday coupled with a spa treatment, packed lunches and free transport to and from activities or free access to bicycles.
- Walkers and cyclists appreciate a place to hose off and dry muddy gear, secure equipment storage and good information about walking trails and cycle routes - none of these are high cost.
- Provide lockers or a secure room for stowing backpacks, top coats, helmets and equipment at a minimal cost.
Remember!
When setting your prices you need to balance the needs of your customers with your profit requirements.
How can I attract customers?
Use creative methods to generate interest
Best methods to reach your target customers
Remove access barriers
Use your imagination and an understanding of your target customers to get their attention. For example, offer mid-week student discounts.
For example, website promotions, trade shows, and radio and magazine advertisements.
For example, if your activity is located in an isolated rural area with poor infrastructure, people may be discouraged from visiting it. To overcome this barrier, pick them up or work with another operator to provide a pick up-drop off service.
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Remember!
Competition influences the maximum price for which a product or service can be sold.
Establish within your target customers a perception about your Activity business that will differentiate it from that of your competitors. Stand out from your competitors by marketing your point of difference, eg, unique activity location.
Competitive advantage
Any advantage that you have over your competitors will help to make your Activity business more appealing than competitor businesses. Your competitive advantage may be a unique superior service that only you can offer, eg professional and experienced instructors. You can also gain competitive advantage if extra value is included in the price you charge.
Identify the benefits you offer
Identity the unique benefits of your Activity business, together with the level of service or standards you provide, and communicate this information to your target customers.
Work together
Visit other Activity businesses and Adventure Centres, and find out how visitors respond to the kind of customer experience that you are trying to create. Build networks with other businesses that you currently view as competitors.
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Estimate all the costs involved in providing your activity, including running costs, in order to ensure that your pricing is accurate, competitive and profitable.
For more on costs and profits see:
Costs basics
Cost control
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Business activity levels fluctuate between high-season and low-season – many Activity and Adventure Centres only open during the summer season. You can charge higher prices during peak season, or during special-events. You may be able to charge a higher price in winter if all your competitors are closed for the winter months.
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