AITO: How low can you go?
The discounting debate – Sarah Archer, UK sales manager of AITO member Beachcomber Tours, says don’t compromise on quality.
I want to tell you a story. It was 1989 and a young, enthusiastic, passionate (and stunningly attractive!) media sales person went to see the advertising agency buyer for a regional electricity company. They were already advertising in the main newspaper for the region but I had a small free newspaper (which wasn’t very good) that I wanted him to buy space in. I’d tried many times before to no avail. However, on this occasion he said ‘OK I’ll add it onto the advertising schedule if you give it to me for 70% off the rack rate price’.
I scurried back to my boss and after some calculator tapping she gave it the go ahead. I could hardly wait to phone the client and after telling him the good news he said: "Well, I’m sorry but I can’t buy it because if you’re prepared to discount it to that level then it only serves to prove to me what I’ve always thought, that it’s not a good product and it’s not right for my client.’
The moral of this story is that I failed to link quality with value. He saw no quality in the product and therefore any price was too high to pay for no benefit. People are price-conscious, but in the ‘luxury’ sector (that word being blurred and over-used) customers are actually looking for a high quality product experience that still offers value for money.
Service is still extremely important. How often have you discounted a booking only for the customer to still demand as much service, if not more, than a customer you haven’t discounted to? We all need to focus on delivering great service and explaining to customers why you and your product are worth paying for. If you discount, you compromise your ability to deliver that service and you sow the seed of doubt that your product isn’t of the quality the customer believed it to be.
It’s undoubtedly tough to put a booking at risk by standing your ground, but good customers are more willing to pay for a good service and a good product than many of us think. After all, there are so many reasons why they should; a hotel with good occupancy, a hotel that’s maintained the quality of food and service, a travel agent that will look after them no matter what and complete confidence that their holiday is going to be a great one. We’ve all been so ground down by the discount culture that we’ve forgotten how to walk away from unprofitable business and we’ve forgotten to be proud of our service, products and our price.
At our regular AITO gatherings – the next being AITO Agents product training this autumn – we’ll continue to discuss and share ideas about how best to educate clients on the value of our service.
Oh and me and that agency buyer? We’re still friends 25 years later.
Diane
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