Online Reservations: Convenience at What Cost?
By Laura Laaman
The internet age means fast-developing technologies are keeping business owners on their toes with increasing pressure to adapt. Many of today’s pet parents embrace technology, paying close attention to your company’s website, social media presence and electronic accessibility. You’ve probably been asked by your clients—what about letting us make reservations online?
It may seem like an easy win, streamlining your reservation process and saving your company time. But what lurks behind this flashy technology is a serious potential trap. Before you try to cross it, you may want to consider these three risks online reservations may pose to your pet care business.
1.Commoditization
Some industries suffer from commoditization, which is a psychological state where buyers may show:
- Rampant skepticism
- Routinized behavior
- Minimal expectations
- Strong preference for quick, effortless transactions
- Little attention paid to any purported differences
- Decision–making based on price
Commoditization happens when there’s no discernible difference to the client whether they choose one company or another for a service or product. Consumers typically don’t care about who provides their milk, gasoline or corn. The same goes for services like electricity and trash pickup. They end up with the same product or result, so it doesn’t matter to them where it came from. The customer will choose the provider that has the cheapest price or the highest convenience every time because there are no other factors they deem important. In a commoditized industry, this is true regardless of the differences purported by the companies or how important/helpful those differences might actually be to the customer’s satisfaction.
The human hotel industry has been able to battle commoditization by spending billions of dollars on brand awareness. Consumers now know there’s a difference between staying at a Ritz Carlton, a Holiday Inn or a Motel 6. Pet care businesses don’t have the same large–scale marketing spend as these hotels, and to many pet parents, a “kennel is a kennel.”
Online bookings are a quick route to commoditization. If you’re providing premium pet care that’s a step above the rest, online bookings won’t work for you the way they might for Ritz Carlton. Pet parents making reservations online may not know or even care how wonderful your services are. Commoditization means the lowest price and easiest transaction wins. You likely can’t compete with some of the fierce competitors of today—especially app–based pet sitters that can afford to charge incredibly low prices at significant losses to capture market share. Whether rapidly or slowly, your company will bleed money and likely die if you try to offer the lowest price on the market. The best way to fight commoditization is to avoid it entirely.
2. Reduced Revenues
Pet care is a highly emotional business, and there’s nothing sentimental about an online reservation form. Even in this increasingly digital era, when a loving pet parent makes their choice of a pet care facility, they will likely reach out and make “real” contact. Therefore, a pet care company’s primary revenue channel is the telephone.
If you’re performing well on the phone, you could be converting two or even three times as many prospective customers than companies that prefer online booking. Sterile online forms simply don’t have the power or human element of a well–trained, competent phone staff. So, what entails a successful telephone process?
- Consistent, compelling messaging to highlight your facility’s superior level of care
- Connecting with pet parents’ emotions by creating a human link a computer screen can’t match
- Skilled and carefully trained staff answering the phones
- Positive phone voice and habits, like confidence and an enthusiastic attitude
Online bookings only make sense if your business isn’t designed to succeed on the phone. If your pet care company provides basic services and you’re not charging premium prices, you may enjoy the convenience of online bookings without much of a revenue loss. Otherwise, you’re likely to experience a significant drop in customer spending over time.
Current software systems for pet care are built for customer convenience and not for maximizing revenue. The most common software programs allow existing customers to either drop down to a lower activity level/package than their previous stays, or even decline one altogether. If the pet parent wants to purchase a basic or lower option, that’s obviously their decision—but making it so easy invariably results in diminished revenues.
3. Inventory Management
Right now, you’re hopefully ramping up for a lucrative business period. The holidays are a critical, peak time that represent a significant portion of your yearly revenue. Making the most of this opportunity means careful design on your part, which online reservations unfortunately disrupt. All too often, the customers who book first for holidays are not the most valuable ones. Look out for:
- Short or awkwardly timed stays
- Selection of the cheapest options
- Aggressive pets that bring increased risk
- Health and age concerns often mean less spending and more liability
- Existing customers who want low–value reservations, as opposed to a high-value new client
I’m not recommending you turn away every client who falls into these categories—but it’s important to be mindful of how you’re managing your holiday traffic. Accepting all reservations as they come in—as with online booking systems—completely removes your leverage in maximizing these revenue opportunities. With more competitors and technological changes than ever, your business performance depends on these peak periods for sustained success. While booking online is convenient, it comes with a hefty price tag that has the power to stunt your growth.
Human hotels have complex, multi–million–dollar algorithms and personnel dedicated entirely to the inventory and pricing processes. Sadly, nothing close yet exists in the pet care industry.
Reservation Request Forms
I’d like to draw a distinction between online booking and reservation request forms. Many of our clients compromise with tech–savvy pet parents by inviting them to send online reservation requests—not actual bookings—via their websites. When a request comes in, the ball is in your court to get the pet parent on the phone and make the most of the lead. But they do need to be tracked and managed carefully. If you don’t have a reliable system to verify follow–up and resolution, your form conversion rate is almost certainly painfully low. The difference between average and quality performance with forms, tours and phone calls equates to hundreds of thousands of dollars per year in revenue difference for the average facility.
As the technology continues to evolve, online reservations may soon have a powerful role in our industry. Until then, pet care business owners must carefully navigate a balance between the potential of the internet and the undeniable power of grounded, traditional, person–to–person business.
Outstanding Pet Care guarantees to substantially increase the revenues of clients with its proven services. If you’re interested in growing your revenues, schedule an individual consultation with Laura Laaman or one of her team members. Call Outstanding Pet Care at 1-888-735-5667 or go to www.OutstandingPetCare.com.