Here’s a thought provoking idea gleaned from the Seth Godin www.sethgodin.typepad.com and passed along to me by Gary Muller, who with his wife Sylvia owns and runs the superb Mill House Inn in East Hampton, Long Island.

Seth writes that “in tough times marketers fret about price.  We think people care only about price”.  Actually, in tough times, he says that people are more concerned about value; in essence getting a return on the price they pay.

Seth introduces a simple but profound equation:  VALUE = Benefit/Price.  While most marketers try to increase value by lowering price, the winners increase market share by “increasing quality and quantity and the immeasurable things that bring confidence and joy to people”.

In the Inn business, the winners are those who create meaningful packages, who offer the personal recognition guests desire, who create a memorable experience.  The losers cut prices and then nibble away at the benefits (no cookies, no fresh squeezed orange juice, and chicken in lieu of veal in the piccata).  Eventually they share their resentment with the guests.

Increase value by increasing the benefits.  A little positive mental effort will elicit cost effective benefits to increase perceived value, guest satisfaction, and healthy bottom lines.

For more of my innkeeping thoughts and stories, I hope that you will join me on my new blog at www.billandheide.com.

Thank you – Bill Oates

Tags: formula, innkeeping, value