How to successfully apply the equal pricing strategy?

12 August 2020

How to successfully apply the equal pricing strategy?

What is the equal pricing strategy?

The equal pricing strategy consists in maintaining the price of a product, commercialized in different online channels, always the same for everyone.

Why would you use this strategy?

The main objective is to maximize reservations by trying to speed them up, that is without pushing the client to look for a lower price for the same product. Despite the fact that we are being used to finding different prices for the same product in different channels it may still make us suspicious. Secondly, this strategy considerably lowers the risk of seeing the potential client run into another product that attracts him more during the search. In any case, the result is that the potential reservation is lost.

On the other hand, applying the equal pricing strategy guarantees the same opportunity to all channels involved multiplying the odds of receiving new reservations. When a specific channel has a higher price than their competitors this is undoubtedly disadvantaged and if they don’t sell, neither does the property manager, resulting in a situation that is not positive for anyone.

If I decide to apply the same price for everyone how can I differentiate myself to attract direct bookings?

The main objective of all property managers operating in the vacation rental business is to maximize direct bookings. The most common strategy is to offer lower prices in their own website but how can we go after direct bookings if the price stops being the main lever? The equal pricing strategy presents new opportunities in this sense, there are various ways to maximize direct bookings without changing prices.

For example we could create exclusive rates, available only for those who reserve directly in the website, that include services or discounts that wouldn't be available otherwise, such as breakfast, free WiFi or a discount for a museum.

Another strategy may be to offer exclusive rates with specific cancellation policies to promote via social networks, newsletters or other marketing campaigns.

Otherwise we could also differentiate directly by product and offer specific rooms, or properties, only through the website in order to force potential clients to book from the website. To avoid penalizing the product we could propose the strongest product we have and prioritize it in the website using the release rule, the minimum number of days in advance necessary to finalize a booking.

The above examples show how we could strengthen fidelization and increase reservations without penalizing any channel pricewise.

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