Course prices – how do I avoid to undercut course prices?

Prices

A growing global problem within the diving industry is the undercutting of course prices. It is an easily solved problem. If every dive center and individual instructor would simply increase their prices – we would easily be able to generate a profit and increase the quality of every course we offer.

I always want to know the course prices from my Members in my regions, especially from a new member of the PADI Retail & Resort Association. The answer is pretty much always the same; “we checked all the prices from dive centres in the surrounding area and then we took the average course prices”

This is a dangerous game – especially because you need to set your course prices according to your overheads and not according to your dive center next door.

 

But how can you stay competitive when you iCompetitivencrease your prices?

In a time where we have other dive center associations offering free crossovers or very cheap membership fees or educational materials for ridiculously cheap prices – you have to provide quality to your customers.

The goal for a dive center is to provide outstanding quality, to grow and to make profit. This is only possible when you have prices with a healthy margin.

Recently I received an email from a member who complained about the material prices from PADI. He told me that he cannot charge more for a Scuba Diver course than € 240.- No one will pay more… as we are still having the crisis…

Wrong! First of all – the customer is paying what you are asking him to pay. Secondly – you need to distinguish your dive center above your competition. You need to show the customer the benefits that they will get when they book the course with you. Lavish them with love and create specialised packages for them. Listen to your customers and their individual needs.

You also have to ask yourself – Does my dive center still look attractive to my customers?

 

What kind of options do you have to pimp your Dive Center;

  • iShop concept
  • Store Wrapping
  • Wall Wrapping
  • Invest in new Equipment
  • Every Staff is wearing the same uniform
  • Clean the Dive Center frequently
  • Attractive windows
  • Professional Staff
  • Etc.

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Competitor

Honestly – who is your real competitor? Trust me, it’s not the dive center next door or a different diving association – The real competition is all the other sports offered to the consumer.

Skiing and snowboarding is, as we all know, a very popular sport in the winter, at least in one of my three regions. I could not believe how much a Ski Instructor is charging per hour. Between € 80 – € 100.-! This price is per hour! On top of that – you need to rent the ski equipment, the ski lift pass and most probably food and drinks – as they are not provided from the Ski School. At the end of the day a student pays for 4 hours approx. € 350 – € 400.-

Every time I talk about this – I`m speechless… this amount is only for 4 hours! And you don’t even get a certificate! Guess what – the ski industry is booming!

Seriously – are we really so naive in the diving industry? That we kill regions and existences only because you pay the student to do the course with you? That’s right, if you don’t charge enough and it costs you money you end up paying the student for all your hard work. It’s ludicrous!

 

Create packagespackages

Allow me to go back to the complaint about the prices of PADI materials – I would like you to consider creating different packages for every course and let psychology do the rest.

 

 

Example:

Platinum Course package – VIP course – the price can be ridiculous high. For example € 1500.- (add for example a Regulator, a Helicopter flight, a dinner with Tina Turner etc. in this package)

Gold course package – Scuba Diver Course plus an additional add on (T-shirt, Fins & Mask as an example) € 320.- or something like that

Silver course package – Scuba Diver Course € 240.-(normal course prices)

This is called ANCHOR pricing and a research proved that 72% of the customers are buying the middle option. In this case it would be € 320.-

Try this out – trust me it works!

 

What can PADI do to help you to make a difference?PADI_horiz_col_print

Every dive center who undercuts their prices are also likely to be cutting corners. This is very important to know for the end consumer. That´s why PADI invented the Professional Image Evaluation where we visit the Dive Center and check the quality of a PADI Center. When they pass they will get a Certificate – which they can show online and in the Dive Center.

 

PBA Lite 2017 Blog HeaderIf you want to learn more about how to distinguish yourself above other dive centres in your area then why not sign up for a PADI Business Academy? They are run in all regions and all you need to do is register, learn and watch your profit margins grow exponentially. Below you will find the link to register for a PBA.

http://padiproseurope.com/padi-business-academy-lite-2017-schedule-pricing/

And of course, you can always contact your PADI Regional Manager.

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Januworry

It’s that time of year again.. “Januworry” You have had a great December, the boats have been full, courses on the go everyday, equipment sales booming and you have been caught up in the holiday swing of things. However come the first week of January you realise that there are bills to be paid, suppliers wanting money, staff needing commissions and all of a sudden the joy of December is quickly forgotten.

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Januworry

Januworry.

Would it not be great to have enough money every month to service all your commitments and still have some left over to reinvest back into your business to fix and repair the boats, dive gear and wetsuits. Unfortunately many dive centre owners do not have a clear idea on where their profits streams are and where they are losing money, where they could be more profitable and even what their gross and nett profits are on courses, equipment and dives. The problem didn’t start in Januworry but this month is a symptom of far greater problems that started many months prior.

When last did you do an analysis of your business?

It is important that you know and understand your own business. Do you know where the money is coming from and where it’s going to? How much profit do you need to make on each and every service that you provide? The dive industry is an amazing lifestyle to be a part of but when you are working for free or making a loss, the glamour of this industry quickly becomes dulled.

What are you charging for your diving courses and when last did you increase the price?

Quite often the Dive centre blames the current economy, the dive industry or the Training agencies for the poor results they have achieved. You will seldom hear a Dive centre blame themselves for the situation they currently find themselves in. Dive Centres are a business that offer dive courses, training, equipment and dive charters. But they are fundamentally a business like all others. What is the inflation rate in your region and has your course price increased to at least take into account this inflation?

Determine profitability.

A dive course price or dive charter price based on your competitions price is the wrong way to go. How much does it cost your competitors to run their course? Analyse each and every component of your business and work out how much profit you are making. Be sure to take account of commitments like rentals, insurance, registration fees, marketing costs and servicing and maintenance responsibilities. These costs, if left unaccounted for, can quickly erode any profitability.

increase-profit

Add value to what you are doing.

Adding value to your services does not have to cost you more money. Simple gestures like helping  lift and carry customers dive gear, friendly and attentive staff and knowledgeable and informative divemasters and instructors all add value to the customers experience. Conduct staff training and set safety and service standards high. Make sure rental equipment is serviced, clean and neat. The list of possible value add ons to your business is endless yet invaluable to your clients.

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Improve your business skills

Many dive centre owners are great instructors, fantastic at leading dives and finding the smallest of critters. But does this earn your business money? You should be working at your business not for your business. Improve your business skills by attending classes, reading books or through online courses. Attend PADI Business Academy presentations to help increase sales and profits. Invest in yourself and you will reap the rewards.

Analyse your business. Determine profitability, charge market related prices, add value to what you are doing and invest in your own business skills.