Local tour operators have it rough. Competition is intense, and distinguishing yourself from other businesses in the "sea of sameness" can be a constant struggle.
A quick Google search for bike tours in San Francisco, for example, yields a seemingly endless array of choices. Some businesses offer city tours, while others offer nature tours. Others offer electric bikes, women's bikes, kids' bikes, and more. Another site simply offers bike rentals for do-it-yourselfers. With all of these choices, how is a customer supposed to make a decision?
The congestion of the tours and activities industry, in which operators offer similar services in the same cities, makes it quite the endeavor to maintain decent profit margins. When customers perceive many similar alternatives, they invariably discriminate on price. After all, if everyone is offering the same juicy red tomatoes for different prices, your natural conclusion will be to buy your tomatoes from the cheapest vendor.
So, if you're a tour or activity operator, how do you make yourself look compellingly different than the competition while at the same time getting the profits you desire?
Combining Services Creates More Compelling Experiences
The most successful — and profitable — software companies in the world package their products and services in creative ways to drive additional revenue. But to drive more revenue, you have to first increase your customers' perceptions of value.
Tour operators looking to sell a service can increase their customers' perceptions of value by packaging multiple services together — creating compelling and unique experiences that customers value highly. For example, California-based Half Moon Bay Kayak Company offers a full moon kayak adventure under the stars, with the choice of paddling to two area restaurants for dinner.
So instead of offering a bike tour around the city, try offering a bike tour combined with a special lunch and an opportunity to choose memorable photos from your excursion. This type of packaged experience creates higher perceived value than just a basic tour, and enables you to command a premium for the packaged experience.
Comparing Apples to Turnips is Challenging
Combining multiple experiences into one package for one price blends the value of the experiences together. This makes it difficult for shoppers to un-bundle the services in their minds and shop the competition.
Customers may be able to see what competitors charge for one portion of your experience, but adding in the other services creates new value. It also allows customers to avoid the hassle of trying to recreate the whole experience on their own for a cheaper price, especially if they're a tourist exploring a new area. The more ingredients in the pot, the more difficult and time-consuming it is to separate and compare the prices of each ingredient.
But if you do decide to play around with packaging services, avoid offering both the packaged services and the independent services at the same time, or you'll give shoppers a point of reference from which to compare the prices. You may give up people who want just a simple bike tour, but you'll make up for it in people who desire a memorable experience who are willing to pay you a premium for the value you provide in creating the experience for them.
Custom Add-Ons Create Incremental Revenue
In addition to driving premiums and discouraging competitive comparisons, packaging services can also create a fertile ground for up-selling. In the example above, tour operators can offer the opportunity to upgrade the package from a basic sightseeing tour to a slightly longer experience covering more attractions. Instead of a lunch of sandwiches and chips, customers could upgrade to a lunch buffet featuring favorite dishes from the area. Or, when choosing their photos at the end of the tour, perhaps customers can receive electronic copies for easy and immediate sharing, or upgrade and send printed copies to loved ones who are a bit shy on their daily use of electronics.
This can all be done very easily with an online booking software like ZOZI Advance, where you can offer custom add-ons for customers to purchase at checkout. Just don't go overboard with too many add-ons. Keep them simple. Too many choices create confusion, and a confused buyer never buys.
It's hard enough managing a growing business and keeping up with the day-to-day in the pressure-packed tour and activity market. But finding ways to provide a more premium experience or ways to package unique offerings enables you to charge more for your experiences (and reduce some pressure).
Think about the intent of the customers you're trying to attract; build your packages and add-ons from there. Ultimately, customers want a great experience, a simple decision, and memories to last a lifetime.
If you're looking for a solution that will both save you hours in your day and give you that extra marketing edge to attract quality customers, check out ZOZI Advance here. You can request your free 10-minute demo here to explore how it can be a fit for your business.