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When Your Average Price is Too Low

Yesterday, I shared my thoughts on how important it is to know the average price of the weddings that you are booking. You can have a very solid pricing strategy. But, when it comes to actually booking clients… if you tend to book the lowest priced service offering, you aren’t going to achieve your sales goals.

Here are 3 strategies for correcting your low average price:

Creative Commons: flickr.com/damongman

Creative Commons: flickr.com/damongman

1.) Set detailed sales goals

Sales goals need to go beyond “Book 20 weddings in 2015.” (I hear a lot of that.) They need to look like this:

Sales Goals for 2015:

8 Top Tier Weddings @ $6500
6 Mid Tier Weddings @ $4500
6 Low Tier Weddings @ $2500

I like to take it a step further and determine how your promotional activities will achieve these goals.

2.) Quit booking low-tier weddings so far in advance

Are you familiar with this scenario: Someone hires you 18 months before their wedding for the lowest package you offer. A few months later, someone wants to hire you for the same day. (And they are interested in hiring you for a higher priced service.)

Weekend dates are limited inventory. There are only 52 Saturdays a year. And, if you are like most business owners in this industry, seasonality brings this inventory down to ~20-25 each year. If someone takes up a spot of inventory for a low price, you’ve sacrificed being able to earn more on a bigger wedding.

One thing to consider is only booking lower priced services 6 months out (or less, depending on what you do).

3.) Raise your middle tier

There is a psychologic reaction to seeing these 3 prices:

$6500
$4500
$2500

Where did your eyes feel safest? (Most will settle on that middle price.) Make sure that middle tier is where you want to be in terms of average pricing. And, if it’s not, give it a little bump. When you know you need a big bump, consider removing your bottom price and adding above your top price so that it looks like this:

$8500
$6500
$4500

And… now… where do your eyes go? $6500, likely. Interesting. Now – your clients are spending, on average, your previous ‘big ticket price’.

Pricing strategy is a little more involved than that. But, that gives you a little food for thought.

Need help with this? That’s what I do. Shoot me an email to see how I can help your business: michelle@sageweddingpros.com .

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October 29, 2014 - 1:15 pm

Stephanie - Thanks! Great article. I always enjoy your post. I do, however, wish you had a pin button. I would like to have a way to access the posts that I want to go back a read again without having to search for them or end up forgetting all together.

October 29, 2014 - 1:57 pm

Stephanie - Yay!! Thank you!!

What is Your Average Price for Weddings?

Not achieving your financial goals? There are so many factors that go into profitability and financial sustainability in a small business. In the wedding business, pricing is a critical component… NOT ONLY how you are priced, but also the price that you are actually booking clients.

0159_SimpleYou may have incredibly solid pricing structure and strategy. But the mix of products (or services) that you end up selling matters just as much.

Here’s an example of how it works… (and for purposes of this example, we’ll work with round numbers)

You have 3 ‘packages':

  1. $2500
  2. $5000
  3. $8000
    The average price is ~$5000. You want sales of $100k this year, so you set a target to do 20 weddings at this average.

So, you start booking weddings…

They look like this:

  1. 2500
  2. 2500
  3. 2500
  4. 2500
  5. 2500
  6. 2500
  7. 2500
  8. 2500
  9. 5000
  10. 5000
  11. 8000
  12. 5000
  13. 8000
  14. 2500
  15. 2500
  16. 2500
  17. 2500
  18. 2500
  19. 5000
  20. 2500

For a total of $71k in sales. WTH? You missed your target by $29k! Whoops.

What’s happening here?

Well, looks like you sold this:

  • 14 weddings of package 1 at $2500 each
  • 4 weddings of package 2 at $5000 each
  • 2 weddings of package 3 at $8000 each

Ahhhh… you mostly sold the base package. As a result, your average price is $3550… that’s a far cry from the $5000 you were aiming for.

So – what can we do about that? Come back tomorrow… I’ve got some tips to help you out.

Need help with this? That’s what I do. Shoot me an email to see how I can help your business: michelle@sageweddingpros.com .

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Revolutionary Business Model – Menguin Tuxedos

menguin

Recently I had the opportunity to meet the owners of Menguin, a tuxedo rental business that eliminates the retail storefront.  Yes, everything is done online – guys, this probably sounds like a dream come true…no need to go into a retail store as the tuxes are shipped to you in the comfort of your home.  The more I got to know the savvy business owners behind Menguin, the more intrigued I became with their business model (not to mention, Mark Cuban is one of their investors so you know they’re up to something brilliant).  Talk about a huge niche in the wedding industry that they are filling, and they have done so in a very short period of time.  Their mission is to be game changers in the tux rental industry.  And, they save penguins (no joke – read about that here).

I had the chance to ask Justin Delaney, Menguin CEO, to explain how Menguin has differentiated themselves in the market, how they’ve scaled their business so quickly, and what they want to be known for.  Here’s Justin, your average dude who is trying to help other dudes by taking some of the pain out of the tux rental process.:)

Justin - CEO

1. Tell us about Menguin – what product(s)/services do you offer, and what sets you apart from your competition?

Menguin is a tuxedo rental brand that is changing the way the game is played for tuxedo rental.  We allow customers to get fitted online using our fitting algorithm, or fitgorithm as our CMO Nathan likes to say. We ship all of our products to our customer’s front door in prepaid, easy to return boxes. And afterwards we save penguins. Menguin innovates. The customer wins. And penguins rejoice.

We also offer a promise that everything will always fit. How we do this is by sending all of our suits and tuxedos out well in advance of the wedding. If there is any problem with fit, then we overnight a replacement. It is literally as simple as it sounds. We run the phones 24/7 to always be there for our customer.

As for our products, we offer literally every color of vest and tie and currently have 9 different suits and tuxedos with about 3 more on the way. Most of our tuxedos come in a slim fit, and we offer every size from little kids (3) to the occasional 6′ 11″ professional basketball player sized human.

Our model is totally different from our competition. The average wedding tuxedo rental takes about 3 hours of driving back and forth from Men’s Wearhouse or the local tux rental shop or Jos A Bank. These shops have an old model for a different century, and we are going to relentlessly give the customer what they want, which is not consistent with what they offer. Our model takes about 5-10 minutes to rent. Our customer service is better. Our product is more hip and stylish.

Of course, many customers have a concern that renting a tuxedo online for what is possibly the most important day of their life like a wedding is a little too risky, and this might be the one instance where I am comfortable saying the customer is totally wrong.

We offer 24/7 service and will literally do whatever it takes to make our customers happy. No one else does that. My first job was at Neiman Marcus, and I learned from the best in the retail and “customer” business – the late and great Stanley Marcus. What I learned was to take care of customers at all costs, and we embody that ethos at Menguin. Every time a customer calls, it rings on every person’s phone in the company because we are in the customer service business first and foremost. Every person under our roof is taught from day one to take care of customers. That is our culture.

2. You have grown the business extremely quickly – what do you feel has been your secret to success?

There is no secret to building a business. I truly believe that. There is an equation though. Businesses need passion and resources  to thrive. The right idea at the right time also helps – that is sort of the “luck” component. Add in the right people and the right goals and you will probably end up heading in the right direction.

This industry has typically tried to fit the customer into its way of doing things. We are created a new way that suits the customer.

 3. Your company has operations in all time zones.  How did you scale the business to be able to achieve that goal?

This is all about partnerships. We have taken our structure very seriously from day one and chosen to be very open to others. We decided to build a structure that utilizes existing capacity and partners rather than try to own the entire chain. We quality test everything to make sure that our partnerships provide consistency.

We have dedicated a lot of resources into hitting 100% of the US in a day or two via FedEx and UPS – this is not something a start-up can usually do without significant financial resources or clever partnerships.  We are a big proponent of creating the right relationships, rather than spending money creating new resources.

4. What have been some of the growing pains as you experienced all of this growth?

Technology changes very fast and is occasionally a few years ahead of the mainstream or just altogether anathema to the customer. We started out with this incredible technology that measured customers via their webcam. It was accurate, investors loved it, but no one really wanted to use it.

What we found was that 95% of our customers were just entering in their sizes instead of using our tech, and many  incorrectly entered their sizes. We take customer service very seriously and will spend to make something right. At all costs. Our replacement cost was expensive as fedex overnights are not cheap. We had invested in a technology that was supposed to keep our orders accurate, but it was not doing this because no one really used it.

We spoke to one of our investors, Mark Cuban, and he recommended a firm he invested in that does fit algorithms. This way, the customer puts in sizes that they know, and we fill in the blanks using databases of sizing information. After that, we check against our own fit profiles and fitgorithm to double check. Now, we are better about nailing the size on the first try. This goes back to following customer behavior and moving with their preference to be as accommodating as possible to the way they want to do things. Customers more or less know their sizes, so we changed our solution from asking them to do something differently to making them comfortable and building accuracy into it from our end.

5. Tell us about your customer service strategy. Ordering tuxes online is a revolutionary experience, so how do you ensure customer satisfaction is achieved and that you meet and exceed their expectations?

I have spoke to this a little over the course of this interview. But basically, we give the customer what they want. We base our entire model of giving the best customer experience in the industry. From the top down, all of us are in the customer service business first.

We are 24/7 and will do whatever it takes for our customers. It is our culture.

We have open communication with our customers.

6. What do you want your company to be known for at the end of the day? 

We want to own everything on the grooms side of the equation for weddings. We think our model and customer first policy is well suited for the wedding industry, and that is what we are going to own. Take care of customers, make them look great and feel smart. That and saving penguins.

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The Simple Plan – Seattle – February 2-3, 2015

Friends! We are heading back to where it all started… SEATTLE!

TSP-SEATTLEFor those of you who don’t know, Kelly and I met in Seattle in 2006. We had a great connection from the get-go. (I think our nerdy business-selves felt a match.) From there on, we would get together every month to work on our individual business plans. YES, people, we really do believe in business plan collaboration as the funnest(!) way to write a business plan. In 2007, we co-founded Get Hitched Give Hope with 4 other lovely ladies. (The 6th GHGH is this Thursday!)

And, in November 2009, we held our very first The Simple Plan workshop as part of Sage Wedding Pros in Seattle!

So, we are heading back to Seattle this February 2-3, 2015 and we invite all of you to join us in this lovely city. (People – the coffee really is amazing there.)

The Simple Plan is our 2-day workshop where we guide wedding pros through the writing of their business plans. (You will walk out of the workshop with a written plan in hand.) Our goal is to give you a solid foundation for success in:

– your business’s over-arching vision
– your marketing strategy
– your operational strategy
– your financial strategy
Business planning is goal-setting at its best… for wedding pros, at every stage of their business. (Goal-setting never ends.)

The Simple Plan Workshop
Easy-peasy Business Planning
Feb 2-3, 2015
Seattle, WA

Learn more and register for the workshop by clicking here.

Watch this lovely little video to see us in action:

Sage Wedding Pros – The Simple Plan from Bella Films {Beth Oslander} on Vimeo.

We are thrilled to have 2 fabulous partners for The Simple Plan Seattle:

sponsored by

hosted by

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Toss The Bouquet Event in Chicago

I am thrilled to be one of the speakers at Toss the Bouquet in Chicago on November 24, 2014!  Toss the Bouquet offers professionals in the wedding and event industry an opportunity to come together to educate their minds, exchange ideas, and elevate their businesses. I will be speaking on “Marrying Your Ideal Client with Your Niche and Pricing” – cannot wait to be surrounded by amazing wedding pros who are committed to furthering their education and networking!  To register, visit www.ttb2014.eventbrite.com and enter SAGE15 to receive $15 off (expires 10/31/14).  See below for more info and the other speakers I am honored to be sharing the stage with…Toss the Bouquet

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