Sunday, December 7, 2008

Discount hurdle - Ask a question

The author shared a real-life story that a few years ago, he had visited another city to attend a conference. Before departing, he had made a reservation in a hotel. As he was checking in, he noticed a sign behind the receptionist saying, "Ask about our special rates.". Curious, he asked and was told he could have the room at 25% off his room rate!

The hurdle he had to jump to be eligible for that discount was to ask a simple question. Yet, he found from the receptionist that most guests did not bother.

A discount hurdle is effective from the seller's point of view if the potential buyers who are highly price sensitive (and probably would have walked away if not for the discount) find the hurdle easy to jump, while others who are not sensitive to price find it hard or simply not worth their while.

The special rates were probably meant to attract walk-in guests, but the hotel applied the discount also to guests who have made advance reservations. Some guests may find it unseemly to ask about the special rates, or they could be business travellers using company accounts.

If asking a simple question can give you additional discount, why should we quietly pay the full price? So the next time you dine at a restaurant, before you whip out your favourite credit card (or cash) to pay for the meal, do ask politely, "Are there any promotions for use of any credit cards?". Different banks may have different dining privileges for use of their credit cards at different places.

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