Table of Contents
- Avoid small friction points in the sales journey that can amount to significant missed opportunities at scale
- Booking fees done right, can be a clever way to cover ticket system costs
- Consumers compare base prices of offerings assuming later fees will be largely the same across sellers.
- Being open and transparent about fees can have a positive impact to buying
- What are industry standard booking fees?
- The most important factor to booking fees is making sure they’re non material to the buying decision
- Specific examples
- The Importance of Finding a Balance
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The Impact of Booking Fees on Conversion: Latest Research and Stats in 2023 | Beyonk Blog
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Let’s jump right in to look at the impact of fees on conversion, consumer psychology, and how to optimise your booking process with options for covering your costs.
When booking a ticket or making a reservation online, customers often encounter additional charges, such as booking fees. The impact of these fees and how they are displayed can have an impact on conversion rate.
Let’s jump right in to look at the impact of fees on conversion, consumer psychology, and how to optimise your booking process with options for covering your costs.
We explore:
- Why implement a booking fee
- The impacts of booking fees on conversion
- How to implement a booking fee to avoid negative impacts to conversion
Avoid small friction points in the sales journey that can amount to significant missed opportunities at scale
In the competitive e-commerce world, empowered consumers demand convenience and speed. Neglecting the basics of a quality sales funnel can make it harder to get customers to buy.
Fortunately, there is clear evidence on what needs to be implemented to maximise sales and limit drop-off. For example, a 2022 survey by Rubber Cheese found visitor attractions have a basket abandonment rate of 70% on average. Of these, 48% were due to extra costs being too high, 24% due to having to create an account, and 17% were due to too long a checkout process. Clearly, selecting a booking platform that can set you up for success is critical to avoid expensive mistakes, and it’s the least you deserve when you’re working so hard to provide excellent experiences.
Baymard Institute research shows similar statistics where 4 out of 5 people abandon cart due to several factors while checking out. A small improvement to the sales funnel can have an outsized return to your business.
Implemented incorrectly (like anything), booking fees can have a negative impact on the customer's experience, leading to a decrease in conversion rates. It is critical to implement the booking fee in the right way to ensure you protect your customers.
Booking fees done right, can be a clever way to cover ticket system costs
Passing a small booking fee onto the customer at checkout can be a clever way to cover the costs of using third-party software and payment processors, either off-setting all costs or a series of costs.
Consumers compare base prices of offerings assuming later fees will be largely the same across sellers.
“People think fees don’t alter relative prices. In a study on booking airlines and hotels, people went for the low base prices. After all the additional fees were added, they had the option to start over and look for a cheaper alternative. Most opted not to, erroneously believing drip prices worked sort of like taxes, affecting the base price uniformly. This isn’t correct, as drip prices can vary substantially between sellers, and the lowest base price won’t necessarily be the lowest final price.” Source: WSJ Journal
Clearly, some level of testing is needed to understand whether covering fees in your base cost or as added booking fees is the best strategy.
Being open and transparent about fees can have a positive impact to buying
Clearly communicating booking fees positively affects customer experience and conversion rates. When customers are informed about fees transparently, they're more likely to complete bookings. This builds trust and brand loyalty, encouraging repeat business.
Studies suggest that people often prefer a more detailed breakdown of costs, as it provides a clearer understanding of the fees involved.
What are industry standard booking fees?
In theatres, shows, conferences and festivals a booking fee of 10% with no cap is the industry norm, however, they tend to have more of a ‘captive audience’ with less substitute products. In the Visitor Attraction industry, there are often many alternative ‘things to do’ and so such significant booking fees can be harmful to the booking experience.
In sectors like theatres, shows, conferences, and festivals, a standard practice is a 10% booking fee without a maximum limit, as they usually have a captive audience. However, in the Visitor Attraction industry, where customers have various alternatives, high booking fees can harm the booking experience.
Some major platforms in this sector impose a 6% uncapped fee for large transactions. This often leads to more phone bookings to avoid fees, but incurs additional staffing costs. Selecting the right fee structure is vital for success.
The most important factor to booking fees is making sure they’re non material to the buying decision
Research from Beyonk Group across thousands of events and millions of bookings across a wide-range of businesses has shown:
Booking fees that remain a small proportion of the overall basket value and never add up to a significant amount have no material impact to the booking value.
Specific examples
For bookings under £50 - a 50p booking fee showed no material impact to sales conversion
For bookings under £150 - a 4% booking fee showed no material impact to sales conversion
Bookings of £500 incur £10 booking fees showed no material impact to sales conversion
Booking fees of larger values should consider dropping the average fee, or setting a maximum booking fee cap to avoid conversion depending on the size of the order value.
Source: Beyonk
The Importance of Finding a Balance
Balancing the impact of booking fees is essential. Companies should weigh customer perception and their willingness to pay extra fees while covering costs. Testing a small booking fee or including it in the price is a viable approach.
Beyonk Group is classed as one of the best online booking systems as we have developed a journey designed to minimise drop-off and maximise conversion.
We provide options to absorb or to pass on booking fees, with flexibility on maximum caps to ensure booking fees are palatable. Based on our research and over 90% of our businesses offering booking fees, we have the expertise to set it up for you to maximise success. We’d suggest testing this out if you haven’t yet done so, all with the goal of getting the system free for you, with no material impact to your customers.
If you're interested in learning more about how booking fees might affect your business, we'd love to schedule a brief 15-minute consultation to delve deeper into this topic.
