Episode 022 – 5 Dynamic Pricing Tools to Increase Your Revenue Up to 40%Mar 30, 2021
Michelle goes over some popular Dynamic Pricing options for you to choose from. She’ll tell you why it is absolutely necessary to pick a company to work with. Also, that 40% increase in your bottom line is NOT just a guess but a reality. You NEED to do this!
Plus, contest details are inside this episode! Enter to win BIG!! Go and Grow!
Transcript of this Episode:
Hi, this is Michelle, the master of money mindset, and you are listening to BNB dash boss podcast.
And in today's podcast, we're going to be talking about dynamic pricing. Everyone has to have it. If you don't know what it is, stay tuned. Our show today is brought to you by order. Audible is where you get your audio books online and get a 30 day trial into the audible membership for free. By going to audible trial.com forward slash S T R revenue that's audible trial.com forward slash S T R revenue.
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I appreciate it. So please do take a picture of it. Send it over to me at Michelle at BNB dash boss. Let me know that you did and we'll enter you in those drawings. So today we're talking about dynamic pricing, dynamic pricing. If you don't know what it is, and if you've been in the business for a while, you do know what it is, but you probably are just listening.
So you can find out some alternatives to the ones you're using. But dynamic pricing. Is pricing that is gauged on a bunch of data. So just picture a bunch of geeky guys in a room, and you can picture me as one of those geeky guys, because I was a math major and all they do all day is look at the data coming in.
How many hits are being done on specific dates. So let's say an events going on in Chicago, suddenly a bunch of people around that date want to book. And they look at it and they go, what just happened here? Suddenly a bunch of people are trying to book around the same dates. So they go, oh, there's a Paul McCartney concert coming in.
And a bunch of old people are going to be coming in to watch Paul McCartney. So they know, oh. Or when events are coming up that most people know about. South by Southwest happens every year or Comic-Con well, not this year, Comicon, sorry, Californians. But most years there are specific events that happen.
And when those events happen, that's when the room rates go up because you know, the demand is high. You can make your room rates higher and you'll get it because everybody wants room needs room and they will pay for. So you'll see people, especially around the super bowl. We've had the Superbowl here in Arizona a few times, and every time it is, people will rent out their houses and they will get like $2,500 for the weekend for their house.
It'll pay their mortgage. For a month or two. So people will pay to stay someplace, especially when things are getting really crowded and busy, just so that they can be there for that event. Certain times of the year, Mardi Gras, new Orleans, things like that. I mean, you're going to pay a higher premium price.
So you have high seasons and low seasons, things like that. But then, like I said, specific things will pop up. You don't know why, but these guys they'll know. They'll figure out why they can tell what the demand is and what you should be charging in order to make money, because they can see how many people are searching in your area.
How many people are searching on specific dates? So they take all these and they create these algorithms that will price your property in a specific path. So you can be focused more on filling your property with rooms, right? So you can say, I want optimal capacity. I want my place filled all the time, or you can have optimal price.
Can say, well, I don't care if my rooms are empty, sometimes I want to make the most money I can make. And these guys will take these algorithms and they'll figure it out for you where the price points should be. Now, when you use a company like Airbnb, Airbnb has their own smart price. They call it right.
But it's smart pricing for Airbnb. It's not smart pricing for you. And I, it is basically made to create more bookings and that's how they make their money. They make their money on bookings. They don't make their money on your profit. Right. And they're not really worried about your profit. They're worried about their bottom line and their profit and getting things.
When you use a company, a specific company that specializes in dynamic pricing, something like a wheelhouse, right? Wheelhouse is the one that we use. And I love wheelhouse. I've tried others beyond pricing and things, and we're going to talk about all of them. Try things out. If you've got three properties in one area, try a different dynamic pricing on each of those properties for the same specific dates and see what happens, see what they price them at.
We're going to compare them here. Just the companies. I mean, I'm going to tell you what they have. I'm not going to choose for you. You get to choose yourself because for some people, in some areas, one company may work better than another. I prefer wheelhouse. Somebody else might prefer some. The bottom line is using a company that specializes in dynamic pricing will literally bring you in about 40% more income than just using Airbnb smart pricing or just pricing.
It will bring you in 40% more. That's huge. That's massively huge. It means you're leaving a lot of money on the table if you're not using dynamic pricing. So you really, really have to use dynamic pricing in order to optimize it. Your profits now, it's not that expensive. It really isn't. And the more properties you have, the less expensive it gets.
I think it averages about $8 a property. They all average about the same, except for air DNA is a little bit more expensive because they've got all the other bells and whistles in that. So when you are on air DNA, you don't just get their dynamic pricing, you get their other tools to be able to invest.
So if you're using it specifically for dynamic pricing, you're overpaying. If you're not using the rest of the services on there. So let's take a look. At our company is with dynamic pricing. The first one we're going to look at is my favorite and because it's my podcast, I'm going to look at wheelhouse.
I love wheelhouse. They're really great. You can find the men use wheelhouse.com. So U S E w H E L H O U S e.com. It's like a spelling Mickey mouse, MOU se. That's what it sounded like. You guys are way too young tin know that, but when you go to wheelhouse, what I like about them is they allow me to do exactly what I said.
They say, do you want to do this to keep your place occupied? Or do you want to do it to make sure you're making the most profits? And we like our place occupied, not always, but most of the time, the reason why is we have people who work for us consistent. And our cleaning crews depend on us. And so since my cleaning crews depend on me, I want to keep them busy.
If my place isn't occupied, they're not making money and they can go somewhere else or they will drop off and they won't have enough income from me. I want my cleaning crews to be busy so that I have a good relationship with them so I can get good rates. So if I promise them, you know, six cleanings on each property a month, I want to be able to make.
And if I am focused completely on money, the difference isn't that much usually, but I'll take a look, I'll set it for one and see what the planned income is for that. And then I'll set it for the other. And if the difference. Huge then. Yeah, but I want to keep my cleaning crews busy and that's why I do it.
I also like the ease of use of wheelhouse. I like the way they lay it out. I like the dynamics of it. I like that I can go in there and change specific things when I want to. I think wheelhouse is really good. And it works with a variety of hosting sites. And so this means that you can connect to wherever your bookings are coming in from.
So they'll go to your calendar there, they'll update the pricing constantly, and they'll show you how to hook that up. You have to make sure though that you don't screw it up by clicking something inside. Let's say you're in an Airbnb. Don't go into her BNB and click anything on the calendar that pertains to.
You always go into your wheelhouse or into whatever dynamic pricing tool you're using and change your prices there, change your dates and availability there. Do not try to change it inside Airbnb. It could accidentally switch off your dynamic pricing and ouch, I'll tell you the prices of Airbnb's rooms compared to wheelhouses rooms are night and day.
So I've had that happen where we had a booking come in and I looked, and it was like 30 some dollars a night. And I was like, what the heck is this? How did this happen? How it happened was we must have gone in there and touch something on the calendar. And as soon as we did, Airbnb prices took over. And we have a minimum set.
Even on Airbnb, we had a minimum set. They didn't care. They resorted to whatever they wanted a glitch in their system or whatever, but we have a minimum on wheelhouse that we charge. So even in the slowest months, our properties will never. No less than a hundred dollars a night or whatever we haven't set at.
Right. So imagine going in there for a property that, you know, averages 130 or more a night, and then suddenly you're getting paid $30 a night for it and no wonder they booked and then they can book for a long amount of time. So I went in and argued with. Airbnb and said, look, I had my minimum set in here first, cause I always set my minimum inside Airbnb.
And then when I switch over. That should remain. And so I said, there's no way I'm going to honor this. This is a no, and we canceled it, but they didn't count it as one of our cancellations, which was really great. But most of the time, if you cancel something like that right away, you're lucky you caught it.
And when you do, you're going to get penalized for canceling, which totally stinks. So make sure that when you play with these numbers inside anyway, That you're doing it inside your dynamic pricing tool and not inside your platform. Okay. Just be really careful because you don't want to have that thing go off.
And then suddenly you've got a bunch of rooms booked in that you've got to cancel. Be very, very careful now beyond pricing is spelled just like that beyond pricing.com and beyond pricing is. The same sort of thing. Okay. So you're talking about their dynamic pricing skills are in there and a lot of these.
Most of them have the same exact things, the same exact tools, except for air DNA, they have much more, but most of them will have insights on performance. They'll have some kind of management system they'll have direct bookings to all your different platforms that you have. They relay those prices to all the different platforms your property are on.
So if you're listing. On several different platforms. They'll push them to those platforms. Beyond pricing is pretty much the same thing. And there's a lot of people I know who only use beyond pricing. They're like, I've always used it. I love it. I tried wheelhouse. I did, I couldn't make it work. And it's probably like the difference between, you know, I phones and Androids.
If you were always an iPhone user, Like, I've always been a wheelhouse user. I pretty much really like, and enjoy the way it's laid out and they've always used beyond pricing. So they've always been a Samsung user, so they're used to it and they like it. I really do recommend that you take these and just do a side-by-side split test on them.
Especially if you have properties in the same area. Because there's going to be a difference and you want to know what that difference is, and you want to know which one works better. And the only way to do that is run a side-by-side test on the same dates with the same sorts of properties. You can do it with the same property, like do a one week trial with beyond pricing and then a one week trial with wheelhouse or something.
But the thing is, you're not going to know because prices change week to week on things. So just depending on what's going on. So you're not going to really get a good idea unless you do a split test with properties that are similar on the same exact dates, but you can try, you can do your best and try and.
Or do your seven day test and see how well you booked and see how it worked out for you and, you know, take an educated guess. But all of these are pretty similar. If I just start going through all of them, you know, I was looking at him and I'm like, throw out pretty much the same. I mean, it's going to be up to you, which one you really like?
So I'm just giving, give you all the names. So beyond pricing, B E Y O N D P R I C I N g.com. Next let's look at price labs. Price labs is hello, dot price labs.co. So H E L L O dot P R I C E L a B S dot C O. I gotta say, I like price labs right away, because right away they say on their website that they'll give you a 30 day free trial and believe it or not.
I think even when we tried wheelhouse, we only got a 14 day free trial. Beyond pricing does not have a free trial up there right now. I liked the layout because they show you all the different options. Everybody has these tools, or pretty much everybody does that I've seen. But they lay it all out for you right there on their home page.
Sylville, talk to you about increasing your revenue, customizing your data plans, bulk adjusting, which is really great. And minimum stay rules. We use the minimum stay rules in wheelhouse. So that means that when you have bookings that are farther out, they require a longer stay. The farther out they are.
So if somebody's booking six months out, the minimum stay is at least seven days, but as it gets closer, the minimum settings come back down because you don't want to lock up all these really strange dates out there. You want to make it worthwhile holding them in your calendar. But they also talk about their algorithms and I mean, it's pretty cool.
I really like how they have it laid out. And they also have a little video for you. Any of them that I looked at, I was like, you know what? I really like you price labs. Their website was really good for gathering information. So if you want to know what the majority of them do, go to price labs, website, and take a look because they show it all to you right on their front page and you can see how it all works.
Plus they have testimonials on there. Um, you have to be careful too. Now, if you have one property it's pretty easy, but when you have several properties adjusting different days for different properties can be kind of tricky. Make sure that you have something that's going to be very easy to use. When we talk about messaging.
Same thing they've gotten better, but they used to be really confusing when it was per property. I still don't like the way exactly that they have it for your messaging, how you have to link each property down below. But there are some things that are specific to each property. It should be a specific way and it should be much easier to do so.
For instance, if you're giving somebody driving directions to. Those are going to be specific to that property, or if you give them parking instructions again, specific to those properties. So some things are very specific and if they are, they should be really easy to change and go back and forth between different.
Now, there are some dynamic tools out there that not only work well with your hosting platforms that you're using, but they work well with other tools like lodge of fine things like that. And so you need to look for those out switch is one of those out switch is U T S w I T C H of switches, another dynamic price.
They both the same 40%. So I think that pretty much across the board, these guys have pretty much proven that they can up your income up to 40%. It is pretty hassle-free. I mean, just link up your property is, and they start to work. One of the downfalls of out switch is the fact that they charge a $50 minimum for their pricing tools and that's expensive all the way up to six proper.
If you have one property you're paying $50 a month, two properties, $50 a month, three properties, $50 a month. Most everybody else charges a percentage of your booking. And so it'll be like 1% of your bookings. I know beyond pricing does a percentage of your bookings and sodas. Wheelhouse. Let's say your calendar is filled in the next month.
You have no bookings because you're pretty much filled. You're not going to have any charges, but as soon as you have a booking, they take a small percentage of that booking. It's like 1%. That's what you want. You don't want to have a minimum of $50. I mean, that's just ridiculous. Especially if you only have one or two properties, that's $25 a month.
That means you would have to make a lot of money before you got your value out of that $50 price. So once you hit seven properties on Auswitch, it's $49, which is about $7 a month. And that's what it should be. It should be either 1% or $7 a month out switch. Isn't even going to be good for you until you get about seven properties.
So I wouldn't think about it until then. Here's something companies like that should think about when they charge you so much per property at the beginning, they kind of deter you from using their services until you have more properties, but what they don't realize it. When you get used to using something.
So let's say you are using wheelhouse. Once you have 7, 10, 20 properties, you're highly unlikely to switch from wheelhouse. Most people are very brand loyal. They're going to not get you. So they're losing those customers because you're going to be used to something else and you're not going to want to switch.
So they should just do this $7 per property or the 1% right away. Because they're losing out, but they're not thinking about that. Now, the last one we're going to talk about is air DNA. Now air DNA. They must have genius guys in there. I love air DNA. I saw someone talking about how they would use Airbnb to invest in their property.
And I was like, ah, you're missing out because the tools on air DNA for investment purposes, Are beyond measure. I think those guys are just amazing. So their pricing tools are fantastic as well. Just looking around, they know what all the properties in your area are being priced at. They know who's making money and who's not making money, you know, just because you see somebody priced at something does not mean they're being booked at that rate does not mean they're getting any bookings at all.
As a matter of fact, if you see. How much they're charging. That means they're not books, so they're not booked. There's a reason they're not booked. Right. So be careful with trying to use Airbnb's pricing because it's really, really deceptive. When you use air DNA, these guys, they know who got booked and what price they got booked at, they can tell what platform they use.
They can tell if it was Airbnb or if it was BRBO the air DNA guys that are in there and gals who are messing around with the numbers back in there, they are amazing. They can tell what's going on with everything. And so their pricing tool is really, really good. But is a package with their entire system.
That's the only downfall, which is to say, if you have stalled and you're not investing anymore, and you're not using it for your specific area to find new properties, then you're going to be paying could be a lot, right? Because what if you're in an A-plus area than your A-plus areas are usually about $99 a month, $99 a month is a lot to pay for price.
It's great. When you're looking for properties, I love using air DNA for that. I can't see that when you only have one property and you're not moving very fast pain, even $39 a month, you know, for dynamic pricey, like I said, air Danae, definitely one of my favorite tools. I'm not going to knock them because they're really great at what they do.
It's just an overkill, you know what I mean? Just a little bit of overkill an air DNA, by the way, is a I R D N a.ca. Another.co. So you'll go looking for that. Now, these we're going to plug in to our new tool page and you'll be able to go in there and click on them. Like I said, the logos and everything aren't in there right now.
So it doesn't look pretty, but it's usable. It's a usable page with usable tools. That you'll be able to click on. So go in there and take a look at our dynamic pricing tool page, and you can check all these out and air DNA. I do not believe I've ever seen a free trial of air DNA, but I could be wrong.
Okay. That was short and sweet because there's only a few that I know. That are really good enough to be on our list. Now, if you know of one that is new, that we've missed and that maybe we should take a look at, please email [email protected] And tell me about it. I want to know, I want to know all the new fangled.
And we want to keep our resources up to date for you guys. So make sure that you let us know we're on everything, but I mean, we can't be everywhere at every minute of the day. So please, please let us know. Thanks so much for listening today. I'd like to talk about more techie tools tomorrow. And have a great day.
God, bless you. Go and grow.
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