As an entrepreneur, it’s hard to not be thinking about business no matter where I am or what I’m doing. My brain doesn’t have an “off switch” when it comes to entrepreneurship, so I’m always thinking about not only potential business ideas, but analyzing other people’s businesses and seeing what I can learn from them. It may not be everyone’s idea of fun – but I find it fascinating!
So a couple of weeks ago when I went to Puerto Rico on vacation with my family, not only did I come back with a fun experience, but also a couple of great business lessons that I want to share with you today!
Lesson 1: Know Your Customer and Set Your Prices Accordingly
For a few days during our vacation we stayed at a upscale resort, which was an interesting experience. One thing I noticed right away was that many of the things you’d typically get for free at a less expensive hotel, you had to pay quite a bit of money for there. For example, a continental breakfast, which even the cheapest hotels usually offer for free, you had to pay $15/person for. You also had to pay to park your car, even if you weren’t using the valet service.
While you may assume that when you stay at a more expensive hotel, more “perks” should be included – that’s not usually the case. Why? The hotel knows its customers, and sets their prices accordingly.
Most people who stay at a resort like that are usually pretty wealthy or their company is paying for it. Either way, they have shown by paying for an expensive hotel room that they have money to spend on luxury and are not concerned with price.
So while paying $15/person for a few muffins and a doughnut may seem ridiculous to you and I, it’s completely worth it for someone with a ton of money or who’s putting it on the company credit card. As a matter of fact, if the price was cheaper, the customers may view the food as “cheaper” and not want to buy it.
So when you are pricing your products and services, make sure you think about who your customer is and how much your customer would be willing to pay. Sometimes a higher price can lead to more sales as it will give your product or service a higher perceived value.
Lesson 2: Put Your Customers First and Treat Them Like Family
In Puerto Rico there’s a small island set aside by researchers to observe monkeys. The entire island is natural habitat for the monkeys and only a few researchers are allowed on the island.
My sister is obsessed with monkeys, so naturally we had to go and see it, even if we couldn’t actually go only island. So my mom found a guy named Paco online who takes people out on his boat to see “Monkey Island” and go snorkeling right off the shore of it. Paco didn’t have a website or social media accounts, but there were a ton of raving reviews about his Monkey Island tours.
So we went on this Monkey Island tour with ‘Captain Paco’ and it was a blast! It was a lot better than any of us had expected from a guy giving people tours on his personal boat. Why was it so fun? Well, Paco didn’t just give us a tour of Monkey Island…he gave us an experience. Picture this:
- A weird (and I say that in a good way) old guy around 65 years old dancing to salsa music while driving a rickety old boat. Not only that, but he brought along a bunch of maracas, drums, and other instruments that he made everyone play along with his music.
- Getting closer to the monkeys on this island than any company-run tour would and getting to snorkel around a ship wreck filled with tropical fish.
- Paco even made homemade ham and cheese sandwiches for everyone to eat on the ride back.
Paco is definitely not a businessman. He doesn’t really do any promotion for his business and doesn’t even own a computer. He’s just a guy that LOVES nature, going out on his boat, and spending time with people. He didn’t have to bring along sandwiches. It wasn’t part of the description and it cost him extra time and money to do. But Paco wanted everyone to have a good time, and it showed.
That’s why he was able to get so many raving reviews online. He didn’t ask for them – people were just so impressed and had such a great time that they did it on their own.
Moral of the story – word of mouth is the most powerful form of marketing. The only way you can get it is if you put your customer first. Treat them like family. If you do that, the money will follow.