Thursday, 15 January 2015

Published 14:47 by with 0 comment

A Good Example of Pricing Local Services

There are more than 40,000 registered active service providers in the Beauty sector in the UK. If you're reading this, you're most likely one of them.

That’s what one would call a though competition. Thousands of companies are fighting to provide hairdressing, nails, waxing or weight loss services to potential clients. Pricing and quality (in this order) are key tools to get the people in. This blog will mainly focus on how to practically win new customers and convert them into satisfied, happy, returning clients.

Pricing is key

Let’s concentrate on pricing as it still is the most important factor needs to be set right. You need a pricing strategy! What…? - you say.

In the last few hundred years pricing strategy on the service provider market was about a tiny little question at the back of everyone’s mind: “To raise or not raise?” Only in the last couple of years came a new wave – discounted deals (aka. group-buying, daily deals, coupons or vouchers). 

The internet revolution

The Groupon-led renewal brought a new era, but also new problems. Because of the inflexibility of the product-focused business model these internet based daily deal websites operate with, most service providers were not really able to use them to success. You have probably heard the horror stories of the unlucky some, who literally went bankrupt trying to serve thousands of bargain hunters. 

We need a revolution on this market!

What is common in the business mindset of an airline company and an event organizer? They both found a factor that is effectively driving their pricing strategy: Time.

Time is of the essence

It is a simple yet important variable of your business that could alter how you attain more customers. Even the most established service providers agree that their appointments are not valued equally. There are many which literally sell themselves. You can sit back and be sure that the after-working hours will be full or close to that. The problems start between 8 a.m. and 4 p.m., when most people are stuck at work. 

A good example

Let me tell you the story of how a squash court operator solved their problem. They were doing well with most of their appointment times, but struggled with the ones around lunchtime. Who wants to play squash with all the running around on a full stomach?

The reality is that there are quite a few people with a flexible enough schedule to do it. They might skip lunch or postpone it but they end up playing squash anyway. All the operator had to do is to use a simple but underused trick: they discounted the empty appointment times, but only those. They didn't run a daily deal campaign with hundreds of coupons. They just put a 50% discount on their empty hours, wrote it on a sheet of paper at the reception and BANG, the magic happened.

They could have found a more effective way to promote the discounted appointments, but the basic idea worked. They are now fully booked, always!

This way of thinking is applicable for all businesses based on scheduled appointments. You only need to take a look at your calendar, identify the least popular time-slots and offer a discount on them.

More on the right amount of discount in our next post.

About the Author: Balazs Monos is the founder of Reserveline, a marketplace that lets service providers sell their unscheduled appointments to potential customers at discounted prices. Balazs has spent 7 years in sales and marketing in both B2B and B2C fields. He offers free consultations on client acquisition and pricing strategy for local service providers from and around London.

Also find him on Twitter! @reserveline



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