It was fortuitous that I recently saw Nolan Burris speak at the Travel Weekly Cruise World Conference in Seattle. He was there to talk about fees versus free, and as always he did a phenomenal job. A few days later I participated in a large consumer show at the Nashville Convention Center. During the show I witnessed two different “episodes” of Nolan’s philosophy at work.
Example #1: Massage Therapists
In order to pull in foot traffic I arranged for two massage therapists to join me in my booth. They gave chair massages for a SUGGESTED donation of $1 per minute. Unbeknownst to me there was a massage therapy business in the booth located immediately behind mine. They were offering FREE chair massages. I thought we were pooched and would have reduced traffic as a result.
I was so wrong. Throughout the day we had a line at our booth, with people happily paying $1 a minute for a massage (some actually paid more). Even during the three hours that our therapists were gone, people were stopping by and WILLING TO WAIT TO PAY! Ironically, most of these people had to walk by the free massage booth to get to us. By the end of the show our massage therapists had over $200 (not including tips), and the free therapist was visibly miffed at the lack of traffic that he had that day. And note, these show booths were by no means cheap, which I’m sure made it sting even more for him.
Nolan pointed out at Cruise World that “free” has a perception of having no value. The therapists charging $1 a minute were perceived as having better massages than the guy giving them away for free. Of course Nolan was driving home the point about travel agents charging fees, but it obviously applies to massage therapists as well.
Example #2: Me
For some time now I have contemplated offering a new service to clients, to help them plan major, long term travel goals. I had decided what I wanted to charge ($75 per adult), but I have struggled with how to launch the program and bring up the fee.
At the show a woman came to my booth. She wants to start planning now to take her adopted daughters to China in three years. I thought “oh what can it hurt” and launched into an explanation of this personalized service that I provide and what is included. Then I told her that normally it is “only” $150 (wording is everything sometimes), but for the show I was offering a 50% discount. Her eyes LIT UP. “Only $75? GREAT!” To quote one of my favorite TV characters: BAZINGA! Nolan might not approve of the unscientific method of researching how to launch this new service, but I’ll take whatever works. It gave me the confidence boost that I needed though. It has since made it much easier to talk about this service, and be confident about the fee and how “little” it is for everything they receive.
What Did I Learn?
Other than learning the obvious (that Nolan is right – but don’t tell him I said that), I learned firsthand that people are not afraid to pay. However, they need to PERCEIVE a value for their money, and free or cheapest isn’t necessarily perceived as valuable.
I get it. It is scary to introduce fees when you haven’t charged them to clients before. The idea petrified me (and in some cases it still petrifies me). Baby steps sometimes are the best way to go. Introduce a new service (with value) and charge a fee for it, to existing and new clients. If it’s a truly new service then existing clients won’t balk at paying for something they’ve received for free before. Introduce fees on existing services to NEW clients. However, tell existing clients about the fees too. Maybe offer to “waive” them temporarily as a thank you for their past loyalty (give them a sunset date on when that waiver will expire).
Ultimate lesson learned, DON’T BE AFRAID. Grab the bull by the horns, hold on, and go for it.
Susan Schaefer is the owner of Ships ‘N’ Trips Travel (www.shipsntripstravel.com) located in Brentwood, Tennessee, and specializes in leisure travel with a focus on group travel and charity fundraisers. Through their division Kick Butt Vacations (www.kickbuttvaations.com) she focuses on travel for young adults under 35. Susan can be reached by email at email@example.com or by phone at (888) 221-1209.