F E AT U R E A R T I C L E
Value Currency
“Price becomes an issue in
the absence of perceived value”
by Melissa Kalan, Founding Director – ARMA
I
was recently conducting some research into hotel
websites, evaluating their offerings across various
distribution platforms for a range of brands and
accommodation types. The number one thing that
stood out was the inconsistency in the value offering to
customers and the communication of value. For
example, on many occasions I found the terms and
conditions via direct booking channels to be more
restrictive, this extended not only to booking
conditions but also room inclusions for the price being
quoted. Similarly, I found a large majority of free-to-
sign-up direct loyalty programs to at times be slightly
more expensive than other distribution offerings for the
same product.
I was left puzzled after my research, however, the
average consumer is not. They are left with a very
simple choice as to which offer is providing the best
value for price relationship or “perceived value”.
What booking channel this is, is of no concern to the
consumer…they just want the best deal right?
Similarly with loyalty programs, it is just as
important the customer perceives the “value” of the
program to be of benefit. Let’s face it, consumers have
an overwhelming amount of programs they can join,
often with limited time to try and utilise many of the
“benefits”.
I recently found myself with a group of friends that
were part of a loyalty program who were deciding
to arrange a last-minute dinner that evening. They
logged-on to their member portal to book a restaurant
and all were unavailable.
Given this was a Tuesday evening in a city location,
I suggested they phone directly and on doing so were
immediately offered a table. On arrival the venue was
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less than a quarter full and remained this way for our
entire evening. My friends were pleased they got to
use a “benefit” of their membership, however, they
were surprised no online bookings were available.
Had I not suggested they contact the restaurant,
they would have assumed all tables were fully
booked and they would have missed the opportunity
to utilise their loyalty benefit. I sensed they felt
slightlyhoodwinked….
Knowing what your customers value and how
they perceive the “value for price relationship” is
very important to convert and retain your customers.
“Value” can be offered and communicated in many
different ways and value perception also includes the
facilitation of the“experience”.
A key revenue management strategy is to
measure what our customers value and capture
their willingness to pay through a range of targeted
offerings made strategically available at the right time.