How can you increase your profits per customer rather than just increasing your revenue? Since profit is what you get to keep, that should be the part of the equation that tour operators focus on improving. There are some pretty easy tips that can help you increase the profit per customer ratio of your tour or activity:

Tip 1: Focus on Gross Margins

To figure out what your gross margins are, you divide your gross profits by your net sales and the result is your gross margin. To find your net sales, you take your total sales, minus out your costs, and that gives you your net sales. If you want to increase your gross margins, then you have to raise your prices. But if your ticket prices are higher than your competition, then you need to stand out from your competition by developing a niche market. If you do something better than everyone else, and are consistent in what you do then people won’t mind paying more for a richer experience. When you can achieve this, then you no longer have to compete with your competition. They have to compete with you.

Tip 2: Cross-sell While on Tour

The simplest thing you can do to increase your revenue per customer is by adding a complementary offer to the experience. For example, offer lunch and dinner options to go along with it, or additional equipment hire. To do this well, you really need to know what your customers want. Think of an observatory tour operator, who offer private telescope viewing sessions. If it’s a couple who book a private viewing, you could offer a glass of wine and tapas prior to the viewing to make the experience more romantic.

Tip 3: Encourage Customer Loyalty

To obtain repeat business, you treat your customers well, and offer them an incentive to come back again. The simplest example is to offer a discount for things like referring you to a friend, joining your Facebook page, or leaving you a good review on TripAdvisor. That way you build a positive relationship with your clients – and, if you impress them enough – their friends. Part and parcel of customer loyalty is providing a way for customers to keep in touch:

  • Social media. You should be using social media to connect with customers online, and attract new customers. For example, you can take photos of your customers on tour and post them on Facebook. Photos and videos are the best way to convey what it feels like on your tour, so you should definitely be using them for marketing.
  • Blogging. Maintain a blog, and encourage your clients to contribute, and participate. The SEO factors can be complicated, but they need not be the focus of the project. Focus instead on providing beneficial content, and the SEO will naturally follow.

The key is to differentiate your business from competitors. To do this, treat your guests well, and offer a unique service that they value. Show that you really understand them and they will happily return (and hopefully with their friends). Rezdy can help you grow your business! If you’re interested in taking a test drive, click on the link below:

 

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Simon Lenoir, Founder and CEO of Rezdy Online Booking Software
About Simon Lenoir

Simon has over 15 years’ experience as an IT professional. He also has extensive experience in the travel industry from being an around-the-world traveller and managing a dive centre in Southeast Asia for over 3 years. Simon is now dedicated to providing the best online booking solution for tours and activities operators; he is the brains behind Rezdy.Outside office hours Simon is a true activity addict – mountain biking, sailing, swimming, beach volleyball – just to name a few. But most of all he loves diving in Australian waters.

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Increasing Revenue Per Customer: Tips for Tour Operators

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How can you increase your profits per customer rather than just increasing your revenue? Since profit is what you get to keep, that should be the part of the equation that tour operators focus on improving. There are some pretty easy tips that can help you increase the profit per customer ratio of your tour or activity:

Tip 1: Focus on Gross Margins

To figure out what your gross margins are, you divide your gross profits by your net sales and the result is your gross margin. To find your net sales, you take your total sales, minus out your costs, and that gives you your net sales. If you want to increase your gross margins, then you have to raise your prices. But if your ticket prices are higher than your competition, then you need to stand out from your competition by developing a niche market. If you do something better than everyone else, and are consistent in what you do then people won’t mind paying more for a richer experience. When you can achieve this, then you no longer have to compete with your competition. They have to compete with you.

Tip 2: Cross-sell While on Tour

The simplest thing you can do to increase your revenue per customer is by adding a complementary offer to the experience. For example, offer lunch and dinner options to go along with it, or additional equipment hire. To do this well, you really need to know what your customers want. Think of an observatory tour operator, who offer private telescope viewing sessions. If it’s a couple who book a private viewing, you could offer a glass of wine and tapas prior to the viewing to make the experience more romantic.

Tip 3: Encourage Customer Loyalty

To obtain repeat business, you treat your customers well, and offer them an incentive to come back again. The simplest example is to offer a discount for things like referring you to a friend, joining your Facebook page, or leaving you a good review on TripAdvisor. That way you build a positive relationship with your clients – and, if you impress them enough – their friends. Part and parcel of customer loyalty is providing a way for customers to keep in touch:

  • Social media. You should be using social media to connect with customers online, and attract new customers. For example, you can take photos of your customers on tour and post them on Facebook. Photos and videos are the best way to convey what it feels like on your tour, so you should definitely be using them for marketing.
  • Blogging. Maintain a blog, and encourage your clients to contribute, and participate. The SEO factors can be complicated, but they need not be the focus of the project. Focus instead on providing beneficial content, and the SEO will naturally follow.

The key is to differentiate your business from competitors. To do this, treat your guests well, and offer a unique service that they value. Show that you really understand them and they will happily return (and hopefully with their friends). Rezdy can help you grow your business! If you’re interested in taking a test drive, click on the link below: