Why most B&B businesses are not making the kind of money they deserve, Part 3
They don’t charge enough for the value they offer.
How do we know how much to charge? The answer is, we don’t. We guess, based on what others around us are charging. The real test is what the market will pay. And the market will pay according to the value they receive.
What we may think is expensive may be cheap for someone else, and conversely, what we think is cheap may be expensive for someone else. It’s all relative to our individual perceptions.
Here’s a little exercise for you to do with a partner or small group. Everyone must write down what they think is a small amount of money. Don’t share this with each other yet. Then everyone must write down what they think is a large amount of money. Then share with the group. The surprising thing is that we all have different ideas about what is a small amount of money and what is a large amount of money. And everyone’s right! For them.
So how do we decide how much to charge in our B&Bs? We test, test and test again. And the interesting thing is that there are customers at every price point. The question is, at which price point do we want to position ourselves, so that we make the money we deserve to make for the value we bring?