Wendy El-Khoury gives her expert insights on pricing

Whether you’re a florist, planner, caterer, or providing any service in the wedding industry, we’re sure that pricing is one of your main challenges. Profitability is the marker of good business, and one main component to unlocking that is establishing price strategies that are reasonable, attractive, and competitive in the market.

If you’re unsure about your price points or sales tactics, Wedded Wonderland Founder, Wendy El-Khoury shares her expertise regarding the matter in the fourth episode of our Wedded Business Digest.

Wendy has two decades of experience in corporate strategy and events. Through Wedded Wonderland, she has revolutionized the industry by connecting vendors with clients worldwide while empowering professionals through her masterclasses. Here, we expand on her main tips from the episode, tackling everything from common mistakes to marketing strategies.

The pricing challenge in the wedding industry

An ailment of wedding businesses overall is undercharging for their services. This can be due to a lack of understanding or a reluctance to raise prices for fear of intimidating clients. But pricing affects long-term growth, so getting it right from the get-go is crucial. To address this, Wendy talks about the concept of “adding value” as a way to justify prices or encourage clients to upgrade.

Value-added offerings

“Ask yourselves, ‘What value exchange can I add so I can get them over the line?’” says Wendy. “I always say in the luxury market, try not to discount value-add so you can actually make the client feel like you are willing to go that extra mile. This means offering a few additional things that you can throw in that are not too costly for you, which can make a world of difference to that client.”

Ultimately, while meager prices are easier to sell, aiming for reasonably higher prices ensures that costs are covered and contributes to long-term growth. It’s essential that such pricing is communicated as being more valuable by offering services that aren’t much of an effort to you.

Competitive pricing

After taking a step back to discern whether or not prices are sensible, the first step to re-strategizing is doing a competitive analysis. This means scanning the market and determining price benchmarks for specific services. Remember that not all services are made equal and therefore cannot be compared. For example, a local florist using endemic flowers would have a different value from a florist that specializes in importing flowers.

“Some common mistakes are comparing Sydney prices with overseas prices, or comparing different destination prices,” explains Wendy. “When couples come to plan a wedding and they’re looking at Lake Como versus Bali versus New York, for example, the price of goods in every capacity is different.”

Market research 

Whatever the case, it’s important to identify where your business is positioned within the market to determine price brackets.

Do research online, attend events, and read up on reports and trend forecasts to get a good understanding. Case in point, if you know that a specific decor style is becoming increasingly popular, that gives you good reason to bump up prices due to demand.

Building a profitable pricing model 

A good price covers costs, has a reasonable profit margin, and matches the brand’s reputation and value proposition. That said, this can be achieved using three principles that companies can experiment with to find what works for them.

Cost-plus pricing

The most common form of pricing simply calculates all fixed and variable costs and adding a percentage of return (i.e. profit margin). While it seems pretty straightforward, there are many challenges, such as not accounting for hidden costs (e.g. administrative time, consultations, travel, and unexpected expenses).

Furthermore, it doesn’t consider the industry benchmark and leaves little room to adjust to competitors who might be based on other pricing structures.

Value-based pricing

Also known as perceived value pricing, this matches the price to what consumers are willing to pay for a product or service. An example is charging higher fees because of years-long expertise in the industry or a reputation for world-class service.

Sometimes, it can also be as simple as putting a price on convenience, like setting up onsite or same-day deliveries. Vendors should think about how to position their premium services to justify higher rates.

Tiered/package pricing

Having prices for different levels of service makes it easier to provide quotes based on clients’ needs and wants. This also ensures that the business attracts clientele with various degrees of purchasing power.

Another advantage is the “decoy effect”: because standard rates feel too basic, clients would feel compelled to select more premium packages. On the flipside, tiered pricing could also be detrimental if packages are confusing or downplay a luxury vendor’s perceived value.

Common pricing mistakes and how to avoid them

The biggest mistake businesses can make is failing to regularly assess or update price points to reflect changing costs, inflation rates, fluctuating market demand, and industry benchmarks. There are some quick solutions per pricing strategy.

Cost-plus pricing

Conduct a quarterly review to ensure that profit margins are intact. Use a flexible markup strategy instead of a fixed rate to accommodate fluctuating costs.

Value-based pricing

Luxury brands might get into the pitfall of wading along mid-range prices. To avoid this, be attentive to your brand’s development and slowly introduce premium prices to test market demand.

Tiered pricing

Analyze packages to see which is the most in-demand and adjust rates accordingly. Consider retiring outdated packages and update offerings to align with changing industry standards.

Justifying & communicating your pricing with confidence

The pull strategy

Once prices are all set up, the next step is nailing communications. Oftentimes, business owners forget the importance of establishing open communication lines with potential clients, dumping a deck of package rates instead. Wendy calls this a “pull strategy,” where service–and not selling–is key. “We need to be engaging. We need to build rapport, creating a connection in order to follow through [on leads].”

Converting ghosts into clients

“We need to ensure that we build a connection with our customer by giving them the information they’re looking for whilst also servicing them in a way where they come back with more questions,” Wendy elaborates.

Potential clients will stay engaged not because their questions are answered but because they get drawn into the expertise of the vendor. “Don’t be afraid of the ghost. Approach it head-on using your knowledge and advice.”

Talk about your services, show testimonials

Part of making prices work is creating trust for services provided. This entails clearly communicating value–the process, effort, and energy put into your work. Couples will not understand the rationale behind prices off the bat, so it’s the responsibility of businesses to explain it. For example, a bride may not get why a dress is more expensive because of the imported French lace used. Bridal designers should then make all details clear from the get-go.

“When you are asked as a service provider, ‘Why does it cost this much?,’ you need to be prepared to answer that,” explains Wendy. “That does not mean that you need to go through line item by line item–it means that you need to explain the cost of goods in general and be able to break down what that looks like.”

Another way to justify price points is showcasing testimonials or a portfolio of past clients, highlighting specific skills and services used throughout. Storytelling is key to sounding authentic.

Managing invoices & payment processes

Have a written contract

Once clients have signed off and bookings have been fulfilled, another challenge that vendors face is following up on payments. Avoiding any financial and legal battles starts with a clear, detailed contract.

In this written document, both vendor and client should have agreed on payment terms, such as deposits and final payments, as well as the responsibilities of both parties for a clear delineation of limitations and accountabilities. This protects everyone involved and–knock on wood–serves as a reference in case of disputes.

Manage expectations

Another reason for having a contract is setting out the scope of work for services. This should be clearly explained by the vendor and understood by the client to avoid any misunderstandings.

“Miscommunication can be a massive issue when it comes to weddings because most of what you’ve agreed on is not delivered until the day of the wedding,” says Wendy. “The more you share what your service includes and the processes behind it, the easier it will be to deliver that because you know you have met the client’s requirements.”

Don’t be afraid to elaborate

Wendy says that sometimes, businesses forget to discuss payment terms before service, thinking that everything is clear in the client’s mind. However, it’s never safe to assume this. Vendors need to build the confidence to explain payment timelines.

Own your service and the rest will follow  

Prices aren’t just bait. Business owners need to understand that those numbers represent their value and position within the market. Having competitive prices should be matched with impeccable service, from engaging with potential clients and explaining end-to-end offerings, to having the confidence to elaborate on contracts and ask for feedback after delivery. At the end of the day, pricing is just as effective as the strength of relationships you build with clients.

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