Posted 05 September 2014
Written by Adele Youngs
Shooting in the dark – why a budget is so important
ADVISORY - THIS ARTICLE TALKS ABOUT THE "BUDGET" MONSTER.
DO NOT READ IF YOU ARE OF A NERVOUS DISPOSITION! YOU HAVE BEEN WARNED...
William Tell had a tough job. Blindfolded, he had to shoot an apple off his son's head. Missing the apple in any way would lead to a very bad situation, especially for his son. But, to be honest, compared to the situation many of us find ourselves in as peak quoting season hits, sometimes I do envy him! He knew two crucial bits of information – the “what” he was shooting at (the apple) and the “where” it was (on his son's head). Sometimes this is two crucial bits of information more than we have available to us!
We all know that it pays to shop around. The other day our boiler at home stopped working. It needed a new fan. The heating engineer who diagnosed the problem told us the cost of the new fan and the labour needed to fit it would be £320. Obviously we wanted to get more quotes. The second we got (for the fan and labour) was for £275. The third, again for the fan and labour, was for £175. Guess which one we confirmed!
However, again, this is a simple situation – we needed a fan and it needed to be fitted – a job that took 35 minutes, a screwdriver and enough knowledge of how a boiler works to put it in the right place. We took a judgement based on how complicated we thought that the job was, and the required skill of the engineer.
Now, return to the situation of a group quotation. Some of the requests we put together for our partners have over 50 components to them – hotels, meals, concerts, visits, guides, transportation etc. The price of any of these components, as we slot them in to the pricing matrix, can dramatically affect the overall price. So, sometimes we need to ask the dreaded question... “What is the group's budget?”
Sometimes we get an answer - great! But often, the reply is:
“Oh, just give us your best price!”
It's the budget monster - run for your lives!
OH NO! This is our worst nightmare - the "budget" monster. Unlike some companies that just put together the same tour for everyone, we tailor our tours to match what the group wants. But, everything in the quotation has a value, and what a group might want in theory might become something very different when they see the price for it...
The group might want a centrally located 4 star hotel next to the Metro, but their actual budget might be better suited to a 3 star hotel in the outskirts. If we are not given this crucial piece of information, then we will quote on WHAT THEY ASKED FOR, which may or may not be what they can ACTUALLY afford. The result can be a huge waste of time for everyone concerned, our partners and the group included.
We realise that it may not be something that the group themselves are willing to divulge. And sometimes, people do fear that disclosing a budget can lead to a supplier pricing to that budget by inflating their margin, when the costs are actually quite a lot lower.
BUT, none of us are replacing boiler fans – we are creating tour experiences which last a lifetime and therefore we all need to be candid with each other about getting the very best experience that the group can afford. Otherwise, the quest for getting "the best price" could become counter-productive for the group, who ultimately are the ones paying for the trip.
It's a bit like William Tell being told there is a "piece of fruit" he has to shoot at and that it's "somewhere" around him... And then expecting him to hit an apple that he has no idea he is aiming for...
So, as we enter what is, for many, the peak quoting season, we have but one plea: if the group has a budget, please do let us know! Then we can stop the budget monster in his tracks and get back to creating the best tours each group can afford.
