As an event rental pro, it’s tough feeling like you have to sacrifice the quality of your events— not to mention your precious profit margins— to keep up with the price offerings of your local competition. It’s important to keep in mind that this policy for pricing strategy is both unsustainable and detrimental to your ability to control your own profits. Remember: there will always be someone out there who will offer cheaper prices, and others who are willing to compete with them purely on a price standpoint. Eventually this race to the bottom is going to drive them out of business, as they diminish their own profit margins and fail to keep up with the quality and service aspects of the events industry. Charging a higher price for your services can benefit your event business in several ways. We’ve listed the top 3 here:
- Customer Loyalty
- Premium Buyers
- Quality Over Quantity
High prices don't automatically mean customers won't book with you— in fact, it means the opposite in many cases. You can also think about this from a buyer persona perspective. What kind of customers are basing their purchasing decisions solely on pricing? Do these types of customers have any potential to stick around in the long term and become ambassadors for your brand? Probably not. You don’t want customers who are constantly trying to sap every bit of service out of you for as cheap as possible. You also don’t want customers who will go somewhere else if they can save a couple bucks, regardless of your past experiences with them. The saying, “play silly games, win silly prizes” comes to mind here. It’s much more worthwhile to compete for customers who are willing to pay more for a better experience and who have the potential to develop into long term connections. People are loyal to incredible experiences above a low price.
If your next concern has to do with whether or not people will actually pay you what you deserve for your hard work and services, please stop yourself right there. There will always be customers who are willing to pay a premium for a better experience. In fact, you can lose out on premium buyers with a low price, as they will perceive your brand as low in value or quality.
If you offer and market a unique, high quality experience, there will be a consumer base out there for you. Let’s look at the live music industry as an example. Every concert or music festival has some sort of VIP section or upgraded seating, and these are almost always the first sections to sell out. Venues know they can reliably bring in customers who are willing to pay extra for bottle service, a better view, or other exclusive offerings. The same concept applies for your event company.
The secret to finding and converting these customers is to offer something unique. This doesn’t have to be anything extravagant— it can be your personality / brand, your customer service, your specific product offerings, etc. The next step is to have confidence in your prices. Show them that you believe in your value, and that they should too. After that you just need to follow through on your promises and deliver great events. But that’s what you do anyways, right? That’s why you’re a professional.
Quality Over Quantity
Ultimately, even if this strategy brings in fewer customers, the customers you do bring in will be more loyal and more lucrative, and it will still be worth it. After all, in an industry where you have to manage your time and inventory carefully, it is much more beneficial and sustainable to have a smaller quantity of events with higher quality. Would you rather make ten sales that each earn you $100, or one sale that earns you $1,000? Focusing on quality to earn more on each event will not only ease your workload as you establish yourself in the industry, it will also make for a much smoother transition as you look to scale up your business in the long run.
Get Paid What You Deserve
When it comes to pricing strategy in the events industry, the question you ask yourself shouldn’t be, “How can I match their prices and still be profitable?” Instead, ask yourself, “What can I offer to make my company stand out?” “What kind of customers do I want to target?” “How much is my time and service really worth?” These questions require a bit more critical thinking, but having a well defined direction for your events business will pay off down the line, and your customers— who genuinely value your time, effort, and expertise— will appreciate it, too.