The holiday season is approaching quickly, which leaves questions for many event rental businesses of how they should price their inventory items during this time. The holiday season indicates great deals for the public, which may seem like a counterintuitive business move considering the sky-high demand. Staying competitive while maintaining decent profit margins through the holidays can be difficult if you don’t have a plan.
With the influx of corporate and private holiday events, event rental businesses are sure to be busy during this time. While offering the best deals may seem like the way to go, there are some important steps to take when devising your holiday pricing strategy.
- Calculate your minimum price
- Learn from last year
- Study your competitors
- Create opportunities to upsell
Calculate your minimum price
Before coming up with any promotional strategies, it is important that you understand your costs and how they may fluctuate during the holiday season. Are you paying workers overtime or hiring seasonal employees to help with an increased workload? Are you paying extra for ads and digital marketing campaigns? Be sure to plan for all of these costs.
Competing for business during the holiday season can feel like a race to the bottom, but you need to know what your minimum price is based on your costs. No matter how much of your inventory you rent out, your holiday season will not be a success if you rent at a loss.
Learn from last year
Take a look back at your data from last year and other years past. You may find valuable information hidden in your past experience. Maybe you ran out of inventory too early and will want to consider raising your prices slightly from last year. Or perhaps you didn’t see very much return on investment from one of your ad campaigns. This year you may consider redirecting those funds somewhere else.
Learning from your past allows you to eliminate mistakes over time and capitalize on your winningest strategies. Be sure to keep records of your promotional strategies and sales history during these times. This way, you will be able to optimize your process down the line.
Study your competitors
Keep close tabs on your competitors’ promotions and prices for the holiday season. You may be able to identify competitive advantages, such as a value offering that they can’t match. This will give you a clearer picture of how you need to compete and strategize.
If your competitors set their prices lower than you can go, let them. They will eventually run out of inventory and you will be able to capitalize with higher profit margins. This may even be an opportunity to raise your prices, knowing that your competitors will not have any more inventory to offer and compete with.
Create opportunities to upsell
Customers love to feel like they are getting the most value possible for their buck. This allows you the opportunity to upsell them on packages and add-ons that satisfy them as customers, and improve your profit margins. Bundling items together in packages is one of the most effective ways to do so.
One of the most effective ways to present a package is as an exclusive deal for a limited time. Labelling a package as a “limited time offer” will make it a bigger draw, and make customers feel that they are getting more value for their money.
Did you know that there are also software tools that can help you upsell? Goodshuffle Pro’s Website Wishlist integration boosts the size of orders by an average of 30% after the initial quote. Click the link above or schedule a free demo to learn more.
Compete on value
While all of these strategies are important during the holiday season, incorporating event rental holiday pricing strategy into your long-term strategy may be even more sustainable and effective. If your main competitive draw is your price, you will find it difficult to profit off of the holiday season, as you get wrapped up in the race to the bottom.
However, those who compete on superior value have the capacity to offer deals during this time with higher profit margins. Customers never came to these businesses for the lowest prices, so a slightly higher price point for higher value will still sell well when a holiday deal is applied. If you want a strategy that is nearly guaranteed to profit during the holiday season with replicable results, competing on value, rather than price, is the best way to go.
Curious how Goodshuffle Pro can empower your party rental company?