Data-Driven Event Pricing
Storefront psychics rely on the “cold read”—their ability to discern information about someone just by looking at them. Successful car dealers use a version of this as well. They fine-tune their pitch based on your shoes, your watch, and your current car.
When you’re selling something, the more you know about your customer, and the sooner you know it, the better off you are.
A new analysis of more than 40,000 weddings listed on TheKnot.com gives florists the ability to infer valuable information about brides (and budgets) from their chosen wedding date, information that can help you book more weddings and generate bigger profits.
Know Your Local Wedding Market Intimately
In terms of seasonal preferences, The Knot’s analysis focusses on the US market, but the patterns identified can benefit any florist who understands his or her local market.
What seasons, weekends, and vendors (venues, caterers, photographers, etc.) are the most desirable in your area? If you aren’t absolutely certain, talk to other vendors whose businesses rely even more heavily on weddings than do florists’, such as photographers, caterers, and banquet halls.
What you will find is that certain days (typically Saturdays), weekends, seasons, and vendors are in great demand, while others are not. That knowledge will let you infer a lot about a bride right away. Then you just need to price your services accordingly.
Pricing At The High End
When you meet a bride who has booked her wedding for one of the premium dates or venues in your area, you can assume she’s not aggressively trying to save money. In fact, she may be paying premium prices to other vendors, and she may be the kind of consumer who associates money with quality.
Brides like this may actually want to spend more money, because price is the generally the most credible indicator of value. Give them the chance! Swing for the fences and offer some high-price, high-margin options.
Not every bride will go for it, of course. But you’ll miss out on significant money if you go the other way and give a quote based on razor-thin margins to a bride who will happily pay a premium for the best caterer, the best photographer, and the best venue on the most popular wedding date of the year. The only thing worse than under quoting and leaving money on the table is losing a bride to a “better” competitor who was confident enough to charge more.
This kind of bride also tends to respond better to “round” pricing (think: $800 rather than $799).
If there is any chance you might become fully booked and have to turn away business for an in-demand weekend, you need to zealously guard your production capacity. When production capacity is limited, each wedding you book represents an opportunity cost. It means there is another wedding you won’t be able to take.
Imagine you owned the Fontainebleau Hotel on Miami Beach. You know booking dates in March won’t be a problem, so booking far in advance isn’t your biggest consideration. Instead, you are more focussed on getting the most money for each night.
This is called revenue management. It was pioneered by the travel industry with the intention of getting maximum revenue for every airline seat and every hotel room.
It works like this. Hotels monitor reservations and adjust prices accordingly. If they are quickly booking a given date far in advance, they raise prices. Turning away business because they’re fully booked months before the desired date likely means they didn’t charge enough.
Florists are often focussed solely on getting booked as far in advance as possible. If you know you are dealing with an in-demand weekend and have lots of time to fill it, you can try charging a little more.
Does that mean straying from your cost-plus formula? Yes, and that is OK. You are under no obligation to charge the same markup on every event, and it’s good business to build in a bigger profit margin for in-demand weekends.
It’s likely that other wedding vendors are doing this already, charging a premium for certain weekends and discounting for others.
Identifying and Working With Price-Sensitive Customers
Almost 25 percent of weddings now take place on Friday or Sunday. This choice is usually made to save money, as many venues, caterers, DJs, and photographers offer discounted rates (or at least lower minimums) for any day that isn’t Saturday. The time of year is important too, and you need to know what seasons and weekends appeal to bargain hunters.
So just like the psychic knows someone is married by seeing a wedding ring you now know something about a bride who wants to get hitched on a Friday: she’s trying to save money. But how does that help you?
Keep this in mind:
People who are interested in saving money respond to “charm pricing”—figures that end in the number nine, like $799. Study after study shows that people see charm prices as representing a better deal. So make sure at least one of your proposed packages uses charm pricing.
A price-sensitive bride is likely shopping around and will be making her decision based largely on price. You may need to sharpen your pencil to find ways to trim costs if you want this client.
If it’s a time of year when events are few and far between and you really want the work, it might be OK to cut margins a little thinner than usual. This is why the other vendors like caterers are cutting their prices. There are fewer events to go around and competition is tighter.