(1:07) Pricing is a complicated issue. I would even argue that it is possibly the trickiest of the Four P's of Marketing (product, price, placement, promotion). It encompasses your costs, profit, competition, quality, location, and numerous other factors.
(1:02) I have heard some interesting comments over the years about pricing. One marina manager, unhappy with a 3 star review that complained about their dockage price being too high, wrote me, "Boaters can't rate a marina based on price." Oh really?
(0:55) I witnessed an online exchange from a boater questioning the fee for a boating club. He asked, "What do I really get for my money?" The response was a list of the costs for the organization (offices, salaries, mailings). The boater replied, "You've told me why you need my money but not why I should pay it." Study that response - it's brilliant because it puts pricing into the perspective of your customers.
(0:47) The problem comes when you think in terms of price only. You have to think about the value to boaters because that's how I will look at it when making my plans. A nearby competitor might charge more than you but have more amenities or a better location. They can charge more and still be seen as offering good value. In this situation, raising your price because the surrounding facilities have higher prices will hurt your perceived value and cost you business.
(0:37) You can still successfully compete if you price your services properly so boaters will view you as a good value as well. Not every restaurant is a 5 star gourmet treat. That doesn't mean that a mom and pop restaurant or a dependable chain can't find success. The key is providing value. I love this definition I found online:
(0:30) "The real essence of value revolves around the tradeoff between the benefits a customer receives from a product and the price he or she pays for it."
(0:25) If you wish to charge a higher price, you'd better be offering me a greater benefit - a better location, nicer amenities, better service or an unusual service, maybe a faster turn around. And remember, the key is not how you perceive your benefits but how your boater-customers perceive them.
(0:18) The sweet spot is when you are able to deliver perceived value greater than what the boater is paying. While your competition plays a key role in your perceived value and therefore your pricing, it's not as simple as just meeting or beating your competitor's price. To price effectively you need to understand your value verse your competition and then determine whether to price at a premium or a discount.
(0:08) Pricing your service too high or too low can have a detrimental impact on your business. Pricing your service just right can mean more boaters, repeat customers, and more profits.
(0:02) And that's the marina minute.