Customer centric pricing strategies.

Image by <a href="">Steve Buissinne</a> from <a href="">Pixabay</a>

The best way to figure out your pricing approach is to put yourself in your customers shoes. To do that, obviously you need to know first who your customer is.

Depending on purchasing behaviour of your customers, we can identify a few types of categories of customers.

  1. If your customer is about to pay for himself, then he will be looking for best price for the best value he can find.
  2. If your customer is making a reservation for someone else and paying for it, then he will look at decent price for some decent value. Can’t book the cheapest, but does not want to book most expensive.
  3. If your customer is being paid by the company, then price has secondary value. The other values will be more important: location, standard, reputation, wifi etc.. Of course for as long as the price is within the company policy guideline.
  4. If your customer is booking for someone else who will pay for themselves, then trust in good and reliable product will be more important than price and other values.

When you think these 4 categories, it is always easy to imagine yourself in customers shoes and recreate the decision making process of your customers.

That is how you should look at price for your product.

Ad.1. If you have customers from the 1st category you will understand that they will research some OTAs, possibly your website. They will look at all price options, possibly sorting options from lowest to cheapest. They will look at the pictures of your product and read reputation score and maybe comments. Your product somehow needs to stand out from the crowd.

Unless you have some features that make your product unique, the easiest way to stand out is the price. No matter what your product is, low price always attracts. It’s called a price lead – it leads the customer to click on your hotel. That is the first task. In order to have a good and accurate price lead, you have to monitor prices on the market, on various sources almost all the time.

It is very common that hotels set their prices once a couple of months and they just review them from time to time. This practice means, that the prices are only accurate few hours after each review. All other times, they are outdated. Do not let the perception of the stagnant market fool you. The market is not just you, it is also the customer. And he is not stagnant at all.

In order to manage accuracy of price leads, you need a tool called rate shopper. The one we are suggesting of course is It is very low price for a very high quality. It allows to monitor as many properties as you need. It uses Google Data Studio for visualisations.

Ad. 2. If you have customers from the 2nd category, you need to create some best upsell-to-value strategy. Continue with the price lead, use for help, but on the website and during the booking process allow customer to add some other values at reasonable price. Price lead will catch the customer interest. Extra products or services, will add the value. Also remember that if your customer, who is paying for his guest, does not know him well, vouchers could be a great solution for adding value without purchasing with wrong assumptions.

Ad. 3. If you have customers from the 3rd category, then you need to make sure your property ranks within the range of company policies. Here you may need to look at wider market perspective. Use customised plan to add to compset hotels not only within your star rating, but also ones that are lower or higher. Lower star rating hotels are fighting with you on price. Higher star rating hotels are fighting with you on product values. Make sure you provide best value at the best price to win the corporate customer. And make sure you communicate that very well.

Ad.4. If you have customers from the 4th group, building your relationship with such customers is the most important. Price is less relevant, but you cannot allow yourself to just ignore it. Part of the relationship is trust. No customer will trust you, when you will not have reasonable pricing for them. So despite the price is less important for the customer, it is important for your relationship with him. Use to effectively monitor your market and make sure you always have attractive prices and trust from the customer.

If you would like to try – please contact me at

Kris Glabinski, revenue manager, trainer and consultant. President of

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