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Setting up a winning pricing strategy
Pricing is one of the most critical factors that determine the success or failure of an offering. A well-planned and executed pricing strategy helps businesses increase profits, attract and retain customers, and differentiate products from the competition.
In this customer story, we look at how boobook helped Center Parcs Europe make data-driven decisions that positively affected customer experience and increased profitability.
Partnering with boobook
Center Parcs Europe operates holiday parks across Europe in the Netherlands, Germany, France, and Belgium, with a new location being opened in Denmark. Guided by the idea of bringing people and nature together, Piet Derksen created the world’s first nature park in 1968 in the Netherlands. The company mainly rents cottages with different facilities, and each park offers a similar atmosphere with access to various activities, from swimming pools to live music.
Being responsible for revenue management and pricing, Frédéric Vandermeulen oversees a team of 25 people consisting of revenue managers and dedicated pricing experts: “As the head of revenue management and pricing, my role is to ensure that the company’s pricing strategy is aligned with our overall vision and goals. Pricing is an incredibly important component of any business and plays a critical role in determining our overall success.”
Pricing is, on its own, a complex issue, and it’s particularly challenging to approach it in the right way in the travel and hospitality industry. There are many factors that impact the price of a hospitality product or service, including supply and demand, competition, and seasonality. “I felt that the pandemic would affect pricing habits and buying methods, so we wanted to hire consultants to review our pricing strategy and ensure that we were on the right track,” shares Frédéric.
One of the key questions for boobook from Frédéric and his team was how they could be more confident that their pricing strategy would maximize revenue and profitability. “The study was focused on understanding the price elasticity for different cottage types and the willingness of customers to pay for preferred locations and other features,” explains Frédéric.
Boobook talked to travellers in five countries (Netherlands, Belgium, France, Germany, and Denmark) and applied conjoint analysis to get insights into customers’ attitudes, drivers, and opinions. One of the new insights was regarding their “free preferred location”, an add-on for some offers. For example, if you reserve with an Early Booking rate, you have the Free Preferred Location included, meaning you can choose your cottage number for free. Vandermeulen elaborates, “We know that the “preferred location” option was creating a constraint on our capacity. Thanks to the study, we are now sure that consumers are willing to pay more for preferred locations, which presents a new opportunity for optimization and profits with some adaptation in our offers.”
Understanding price elasticity and customer willingness to pay
Data is critical to any successful pricing strategy. By leveraging data, we can gain a deeper understanding of customer behavior, preferences, and willingness to pay. This allows us to make informed pricing decisions that drive revenue growth, market share, and customer satisfaction. Pricing studies are a mix of art and science, where numbers and methodologies are just part of the story. At boobook, we believe what matters most is looking at the broader picture, so we align the price with the brand, the product characteristics, and consumers’ willingness to pay.
Through the pricing study, Center Parcs Europe gained valuable information that helped them make informed pricing decisions to increase customer satisfaction, market share, and profits. The insights were used to confirm and fine-tune strategic pricing decisions company. “The study revealed that there were differences in price elasticity between different countries, which had previously been overlooked. This allowed us to adjust our pricing strategy to accommodate different markets better,” Frédéric emphasizes.
Making strategic pricing decisions to optimise revenue
Thanks to the pricing insights, Center Parcs Europe confidently proceeded with optimising its pricing strategy, confirming their insights on customer behaviour. As a result, the company was able to make strategic decisions that increased profitability while meeting customer needs.
“The pricing optimisation we conducted with boobook was incredibly valuable to our overall pricing and revenue management strategy. It gave us invaluable insights into customer behaviour and preferences and allowed us to make data-driven decisions that drove both revenue growth and customer satisfaction,” explained Frédéric. By leveraging data and insights, the company was able to optimise its pricing and revenue management strategy to achieve its business objectives.
And the guidance doesn’t end with the study. Frédéric finds the price simulator provided by boobook very useful – he still uses it to confirm any new decisions. “The pricing calculator is also a great tool to share with the team and other departments. As it’s based on real data and numbers, I feel more confident when I need to back up my arguments if we should adapt our initiatives”.
“Boobook’s pricing expertise was appreciated. Working closely with the team was great, very collaborative. We were really happy that you didn’t just give us numbers, but you also guided us to important conclusions,” concluded Frédéric. Are you looking to launch a new product or service? Not sure how to approach your pricing strategy? If you need help optimising your brand’s portfolio pricing, get in touch. Our team is here to assist you in developing your ideal pricing strategy!
