Thanks for letting me write this stuff. I think we might agree that there are few things more gratifying than being ‘heard,’ and this blogging is a great way to share ideas.
As a boy, I often ridiculed, then later marveled at, my mother’s journaling. It seemed so pointless! Why would you write down what has already happened, when you were there when it happened?!
Only much later, actually, in the month after she died in 2005, did I realize that she wasn’t necessarily writing it all down for some historical document, but she was processing. She was processing the incredible amount of data, numbers, sales, weather, life experiences, kids, problems with kids, being married, working on National Peach Council, and on and on.
Mom’s life was an avalanche of inputs. Our lives are an avalanche of inputs. She was writing to process it all, to make sense of it all. I didn’t get it until it was too late, but sometimes – Better late than never.
In the following three emails, I’m processing. Processing the first season, I’d like to call, post-pandemic, and I’ll need some help.
Please call me, email me, tell me I’m wrong, misguided, right on the money, or whatever – just let’er rip and share your experiences.
One caveat: No complaining. No complaining about people, customers, weather, etc., because it is not productive.
Part 1: “I was completely right, for once.”
If you’ve been reading this blog for any length of time, you know that I am on a crusade, a mission, to encourage agritourism operators to charge appropriately for the value they create.
In 2021, we launched Pricing Strategy Bootcamp (PSB), which I created for NAFDMA’s membership as a webinar workshop. It became the top attended webinar series EVER in NAFDMA history, then took on a life of its own, and is still available today!
WHY? Because it was all about pricing, profitability, and the PAIN around increasing prices. As it turns out, I was completely correct, for once.
As we found throughout the webinar series, agritourism operators are in so much pain; pain from shame, family resistance, feelings of unworthiness, fear of rejection by customers, to name a few.
It just HURTS to talk about pricing and profitability, BUT dealing with that pain couldn’t have come at a more timely moment. For once, if the PSB attendees were brave enough to follow the plan to raise prices, we grew profitability AGAIN as the world opened up in 2021, consumers could travel again, and inflation crept into the system.
Think about 2020: Agritourism was perfectly positioned to offer outdoor, safe entertainment when NOTHING ELSE was open. Many of our industry colleagues had the best year ever in 2020.
In 2021, the world has opened back up (almost) entirely. Our once captive customers now have every option available for travel, leisure, food choices, and restaurants. In this competitive market, when the hardest thing to do is convince a guest to choose you over something else, it’s better to charge more and need few guests to meet your goals.
Inflation is on the rise. Raw materials, fertilizer prices for our farm, seed costs, transportation of everything are going up. What an incredible time to have already raised your prices!
It’s not too late. Christmas is coming, and if you have products in stock, you must make sure you are charging “Full price PLUS” to extract as much as you can from customers right now.
My first prediction of 2022 is that THIS is the LAST “Pandemic Christmas.”
What do I mean by that? By next year, the stock market gains, the relief checks, the grants, the stimulus, people’s savings accounts, the ability to “quit and reassess my life goals while I wait for a better job because every business is hiring” is all going to be GONE.
“The stock market is the story of cycles and of the human behaviour that is responsible for overreactions in both directions.” – Seth Klarman
Leading up to the 1900s Dot Com Bubble bursting, people were saying, “It’s a new day, new market, it’ll never come down!”
Leading up to the 2008 housing crisis, “Property values can only go up!”
This blog post is not a victory lap for my price-increasing crusade. It is meant as further encouragement to charge what you’re worth. You put your business on better footing for the inevitable turn of the markets, cycle downward, and change in conditions when you do.
I think this is the last Christmas for wild spending, so please, if you are open, I encourage you to go get it!
Here’s the question of the week as you revisit 2021:
- Have you adjusted your prices, if so, how/where, and what tangible impact did that have on profitability? (Yes, please get yourself a REAL number!)
Our results? We were down over 3,000 guests and still hit above our revenue from 2020. The only answer is PRICING.
In Part 2, we’ll discuss our new plans to “Intensify the experience without growing the footprint.”
Thanks again for reading,
Hugh
PS Thinking about Super Mega Slide for your operation? December 1st is the deadline for April delivery, December 31st is the deadline for May delivery, and, of course, saving on your taxes. , then order online or call.
