I often see heated discussions on social media about whether you should charge the same rates for Friday, Sunday, weekday, and off-season weddings and events, as you do for Saturday nights. There are passionate arguments on both sides. Some people contend that you’re doing the same work; therefore you should charge the same. That’s a sound platform. Others say that they’re only going to do a limited number of events per year; therefore they hold to their price—also a sound argument.
The other side speaks of not getting as many inquiries for Fridays, Sundays, or weekday events, so they offer a discount to encourage those to book. That too is a sound platform. There are successful businesses on all sides of this discussion.
So what is the right answer?
That’s the thing—there is no one right or wrong answer. It will depend upon your business model and what your goals are. Are you trying to increase the number of events you do? If you’re already booking the most popular dates, you can’t do any more events unless you take on more staff, something many of you are reluctant to do. But trying to book the dates that are less in demand isn’t as easy as just saying you are available. It takes a strategy that includes marketing, advertising, networking, and yes, pricing. I’m not saying you have to discount to book those dates, but it has to be part of the discussion.
Supply and demand
The most basic principle of economics is supply and demand. I’ve spoken and written about this often, and it’s a common discussion when I’m consulting with businesses, like yours. What we all want is more people wanting to buy our product or service (that’s the demand) than we have available to sell (that’s our supply or inventory). Then we have pricing power. When there’s less demand there’s pressure to lower pricing.
What’s your inventory?
All of us have an inventory, and it’s not just the physical goods that are involved in our work. Time is the most limited resource of all. No matter how many weddings or events you can orchestrate in a day, there is a limit. Even if you staff-up you’re going to eventually run into a wall and run out of supply. For some of us it’s easier than for others; an entertainment company can hire another DJ easier than a venue can build another banquet room. If you’re doing the right marketing and networking you should be getting enough leads to at least book the most popular dates. If you can fill your calendar early in the season or without much price resistance, you probably have pricing power.
Do you like getting a discount?
Another factor to consider is that everyone likes getting a discount. Don’t you? Have you ever asked for a discount? Probably. If so then don’t fault your customers for asking as well. You don’t always get one when you ask and you don’t have to give one just because you’ve been asked. But don’t get upset or insulted because someone has asked you for a discount. You don’t have to say, “Yes.” You can say no, with a smile.
But my services are the same no matter the day
That’s true. You’re going to provide the same level of quality and service no matter what you’re being paid, no matter the day of the week, or month of the year. That said, there are lots of times when we get to pay more, or less, based upon some factor. Movie theaters often have weekday matinee pricing, yet the movie is the same. Seniors and students are often offered discounts to the same events that the rest of us pay full price for. Military families are often offered discounts as well. Is it right, or wrong, for any of these groups to pay less than everyone else?
Discounting vs. negotiating
In my presentation on pricing, I discuss discounting versus negotiating. The examples above were all discounts that have a structure. They have rules and those rules are applied the same to everyone. Every senior who attends the show, or stays at the same hotel, is offered the same discount. If they ask for a bigger discount the answer will be no. The rules for the discount can be easily explained and you can see whether you qualify or not.
Offering a discount for a Friday evening wedding versus a Saturday evening wedding is an easy rule. If Saturdays book up fast for you and Fridays don’t, you might choose to offer an incentive. Or you could just have a higher price for Saturday, not a lower one for Friday. Yes, it’s semantics, but that too is very common. Workers get paid time and a half for overtime, yet they’re doing the same work. Hotels and airlines charge more for high-demand times.
The Wild West
Negotiating, on the other hand, has no rules. You give larger or smaller discounts to different customers, even when they’re buying the very same thing. You offer larger or smaller discounts depending upon how badly you want that sale, or in many cases, how desperate you are for that sale. I’ve often said you should always negotiate as if you don’t need the business—even when you do! In this digitally connected world people talk about, and read about, what others have gotten.
So, should you discount?
Whether you decide to discount or not, or charge more for some dates or not, is solely up to you. You should do it to fulfill your business needs and goals, not anyone else’s. Listen to what others are doing, but don’t copy them. Do what’s right for you. As a consultant, I help people decide what’s right for each client. As a businessman, I don’t expect anyone else to copy what I do—because that’s what’s right for me and it might not be right for you. Choose your own right path.
Get Fresh December 2015
eNews December 2015