All-inclusive: is giving it all a good idea?
Can small businesses copy the hotel format?
As I try to relax around the pool on holiday, I’m congratulating myself on my choice of hotel. As an all-inclusive resort, I know what I am getting (pretty much everything) and for me at least, it means a stress-free holiday.
The cynic in me realises that while they sell the concept as ‘me getting more for my money’ I know the reality is that I probably haven’t drunk enough wine, eaten enough lobster or been on enough Pedalos (yet) to get my money’s worth.
But you know; I’m ok with that.
I don’t feel cheated because the All-Inclusive concept has been done so well here. It feels luxurious and makes you want to stay again.
I began to ponder as to whether this successful holiday business model could be copied by a small business or freelancer. Could they increase their customer base and make more money?
Does it depend on the industry?
If you own a service-led business then I think the concept is easier to implement.
Imagine that you’re a fitness instructor who runs a number of different classes during the week.
Currently, customers sign up to Boxercise and either they pay for each Boxercise lesson or 10 Boxercise lessons in one go. Then imagine what would happen if you offered those customers the chance to go to any of your Boxercise classes and also any of your other classes for one all-inclusive fee.
They’ll pay more than they did when they were just attending Boxercise but less than they would if they were paying for each class independently. Your customers get cheaper gym classes and you get the chance to increase your numbers at the classes that are less well attended.
But what if you make luxury chocolates for example? Is all-inclusive still an option?
Well, sort of. You would need to consider using a subscription-based business model.
If someone buys chocolates from you three times a year and spends around £20 a time, then you could suggest they switch over to a monthly subscription. The monthly cost to them is £8 and for that they can choose a set number of chocolates each month, plus maybe give them 10% off gift boxes.
As a freelancer or small business, this has the advantage of giving me a more regular income. The trick is finding the right price so that you’re not left out of pocket.
How would all-inclusive work for you?
Now, if you’re not a personal trainer or you don’t make chocolates, you might be wondering, what’s in it for me? And I agree that a truly hotel style all-inclusive business model is going to be hard to replicate for many businesses.
However, thinking about your pricing strategy and looking at a bundle pricing option or subscription model is seldom a bad idea.
Bundle pricing means you offer clients a number of products in one sale for less than the cost of buying them individually. It can be a great option if, for example, you have older stock that you need to shift. And it’s a chance for your loyal customers to try new products at an introductory rate. If they like them, then they will probably pay full price for them the next time.
As mentioned above, subscription pricing is a way to get money up-front from customers while offering them a set service or selection of products. It results in a more certain income stream for you and it provides your customers with the opportunity to try out new products at a reduced rate.
There are lots of different pricing strategies out there, so why not take a look at yours to see if it’s working for you?
Can YOU afford to go all-inclusive?
Before you change your pricing strategy, it’s a wise move to speak to your accountant first. They will have a good insight into your business and can help you identify which products and services are providing you with the biggest income.
At THP, our professional team has a wealth of practical business knowledge and may be able to suggest something which you hadn’t previously considered.