Tuesday, March 15, 2016

Discount Wisely

(1:07) Properly setting your pricing structure is a critical part of your marketing and sales strategy. Pricing too high will reduce, and possibly eliminate, your value to potential customers. Pricing too low can be equally damaging.

(1:00) Setting your price too low, or indiscriminately discounting, will send the wrong message to your target customers and may attract the wrong segment for your marina. In addition, it will reduce available revenues for maintenance and improvements which can lead you down a terribly slippery slope.

(0:50) It is easy for the naive marketer to rush to a price reduction when he needs to increase business. Don't get me wrong, well thought out discounts, as part of a larger marketing plan, can be very powerful.

(0:43) Unfortunately, discounts are too often knee-jerk reactions to lagging business. And they are often done without understanding why boaters are not choosing your marina. Hint, price may have nothing to do with it.

(0:38) So your first step is to know who is your target customer and to understand those customers' needs. Then fill in and enhance your offerings to better meet those needs. Set your pricing structure to create compelling value for those customers. Finally, discount wisely to fill in slack times, attract new customers who fit your target profile, and encourage boater behavior that enhances your marketing plan.

(0:25) An easy example is weekly and monthly pricing. A great way to tell boaters that you are a destination worthy of a longer stay is to offer attractive weekly and monthly rates while keeping your daily rate stable.

(0:19) Make sure you do not become a One Hit Wonder. One of the biggest dangers of deep and indiscriminate discounts is attracting boaters who's sole criteria is a low price. Using a discount to bring a boater in once is not a good use of resources.

(0:12) The ideal discount will attract new boaters to your marina that meet the criteria for your target market. These are the boaters who will then be attracted to the value that you bring, even when your prices are not discounted. Bringing boaters back is where you will find real success.

(0:02) And that's the marina minute.