Dynamic pricing is a very hot button issue in the industry today. The business is certainly heading this way. Dynamic pricing refers to the practice, that as occupancy increases so does the pricing to the retail consumer. We have to build it in our Astra software, in fact we are testing it now.
However personally, I am not exactly in love with it. At our park we work so very hard to get a customer and we are very worried about breaking that trust after we get them. No easier way to break that trust then to start charging different prices to different customers for the same item. Because that is really what we are doing.
I understand that the business is heading that way. Money talks. Hotels and airlines are great it and it works for them. However, why in the campground and RV park business, do we want to be like the airline industry? I don’t get it. Outside of Volkswagen, is there a worse industry that has broken the consumer’s trust? How do we then re-establish that trust to get them to come back? What does that re-establishment cost?
Noted customer service expert, John Goodman, estimates that only 50 percent of customers will complain about a problem. (The actual number varies by industry, company, and product.) Of those complaints, Goodman estimates that 90 percent are directed to frontline employees.
What about the other 50 percent who don’t complain at all?
This is the really scary group. They silently take their RV down the road and they tell everyone they know (except for you) about your poor service. How you “screwed them over” on price. It does not matter what the actual price was, it is the fact that their neighbours benefitted and you did not. And just like that the trust is gone. The damage to your reputation and your bottom line could be well underway before you even know about it.
There is an intrinsic tension in dynamic pricing when it comes to our business. Our business is supposed to be a personal family business; get to meet the owner, get to meet his/her family, see how they run their business, get away from the hustle and bustle and come back year after year and see the same people. Sit around the fire with them. Catch up on their lives. Rest assured you will not be mistreated by the owners because they are your “friends”.
The tension then lies in the fact that after you install dynamic pricing we are saying “yes we will give your neighbor a better price because he is more organized (booked earlier)”. Poof, all the good will is out the window.
To quote the American poet Maya Angelou:
“I’ve learned that people will forget what you said, people will forget what you did, but people will never ever forget how you made them feel.”
I do not have my head in the sand, I understand dynamic pricing is here to stay and accept we are heading this way, but personally I worry about it.
Thanks to everyone who stopped at our booth at ARVC and said hi and thanks for taking the time read this.
Peter Kearns
Managing Principal
Misson Management Informations Systems Inc.
Campground Manager Software@/ BookYourSite™ Astra
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