The bigger and richer you are

I’ve just come across an interesting situation. When I tell you about it, you may not find it surprising. In fact I don’t find it surprising either. But this is one of those things, where you know it happens without the hard evidence – well, now I have the hard evidence. Here goes.

Through my work  (very large public organisation) they booked a hotel via a large Hotel Service. Cost for one night inclusive of full English breakfast the next day is £38. But get this – minutes after I received notice of this by email (and it took only about 30 min for the email to find me from time of purchase) – I then go online and check the price of ‘one night with full breakfast the next day’. Guess how much? Go on guess!! It was £65.

So what does that mean? Well here are some possibilities:

  1. The price went up minutes after my people made the booking. Not likely because the supersaver rate which ‘we’ did not pay for is £37 and that does not include full breakfast which is £7.95. And that supersaver rate is three days earlier than date on which I’m staying. Normally later bookings are more expensive.
  2. So even if the above is true my people got it for £7 cheaper, than Joe Bloggs.
  3. But if I reckon correctly they actually got it for as much as £27 cheaper.

What’s the point? If you’re a big organisation doing business because of the power you wield, you’ll be given discounts that Joe Bloggs of the regular public will never see. Do I need to spell out why that’s the case? Okay, it’s because a large agency has a lot of muscle, can bring much business, so that dealing with them brings a more regular income stream than Joe Bloggs (who in general has less ‘money muscle’).

But of course the above phenomenon is not confined to big business. It also applies to very rich people – who are likely to get loads of free samples, tastings and other freebies or heavy discounts. The spending power of  a purchaser causes sellers to lower their price. Yes – you and I may always have known that at a gut level but this week I think I’ve unearthed the evidence – at least in one situation  – that confirmed my suspicions.

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