Could You Charge 70% More With a Better Business Name? Is your small business stuck charging low prices for your products or services? The problem might not be what you're selling. Here's how one business raised prices by changing its name.
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Is your small business stuck charging low prices for its products or services? The problem might not be what you're selling. Turning things around could be as simple as taking on a new business name -- one that implies higher quality.
That's the takeaway lesson from a recent episode of Hotel Impossible, the new Travel Channel show in which expert hotelier Anthony Melchiorri visits floundering small hotels and helps their owners turn them around.
On a recent episode Melchiorri and his team visited a small hotel in Miami that has $1 million in debt. Melchiorri first pointed out that the place had a problem with branding. Some signs, including the big neon sign on the top of the building, said "Motel New Yorker." Another on the front window, though, said, "The New Yorker - Boutique Hotel."
Related: 7 Tips for Naming Your Business
Consumers have a very different impression of the word "motel" than they do of "hotel," Melchiorri explained. One is considered lower quality, while the other is perceived as more luxurious. Fixing the inconsistency and positioning the place as a hotel could enable the owners, Shirley and Walter Figueroa, to charge more than the current $79 a night rate -- up to 70 percent more.
To further improve the branding and make the space more in line with a hotel, Melchiorri also suggested the owners improve the property. He targeted a spacious interior courtyard where guests eat breakfast -- a unique feature that no other motels in the neighborhood have.
Melchiorri's design team transformed the courtyard into a sunny space with yellow walls and white lanterns. It can be used day and night, and helps communicate the hotel's luxury position.
Virtually overnight, the hotel could command much higher rates for those very same rooms. The repositioning also works well because all the other places to stay in the neighborhood are motels, so now The New Yorker stands out.
With the owners' debt load, it remains to be seen if this repositioning happened in time to save the business. But if they have to sell, the Figueroas have a more valuable property with the new name and look.
How have you repositioned your business to charge more? Leave a comment and share your strategy.