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Price Expert: Virtual Office Market Immature When It Comes to Pricing

Cecilia Amador de San JosébyCecilia Amador de San José
July 6, 2016
in Business
Reading Time: 2 mins read
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“There is not a single virtual office provider with a ‘best pricing strategy’ that can be replicated within the industry.”

Officing Today has often found that virtual office prices for the same center will vary widely across channels. We couldn’t find a clear intention behind the price variation, so we spoke with price consulting expert Fernando Ventureira from Pricing Solutions to better understand the value proposition of virtual offices.

The European based company has been a virtual office user for several years now, which has provided them with an insider’s look on how their pricing strategies work.

According to Ventureira, the varying pricings across different channels is due to a lack of internal structure from the part of the provider.

“From what we’ve observed, there is no clear definition of ‘value’. Some operators set their prices in lieu of their competition, some in terms of capacity, and some in terms of location. But even so, one can find offices in a better location at a more aggressive price.”

“The Virtual Office industry is what we call an immature market when it comes to pricing,” which would explain the variation of pricings across channels. “If you do a search of virtual office prices, you will find that some are extremely high for no reason and others are relatively low for no apparent reason as well.”

Pricing Solutions believes this is linked to the fact that virtual office providers haven’t yet been able to determine which is the highest value that they offer their clients. In the end, “the biggest competitor of a virtual office provider is none other than itself.”

This is a phenomenon that Pricing Solutions has observed when looking at virtual office pricing across different channels. Ventureira comments how as virtual office users, when they’re looking for a new location they’ve noticed that the price for the same virtual office is different online than it is when they call the center, and it is also different when they call the office location directly.

If this has been observed internally, how does this play out externally, with virtual office wholesalers and third-party sellers?

It’s at this point where a pricing strategy is key for virtual office providers. As it currently stands, most virtual office providers negotiate on a single term basis with wholesalers and third party sellers–a narrow focus and approach that leads to incomprehensible price fluctuations across channels.

What pricing experts suggest is that virtual office providers need to establish the lowest price at which their offices can sell, regardless of the channel. Doing so will give them control over their prices–regardless of whether offices are being sold internally, by third-party sellers, or by wholesalers–and also allow them to think about price promotions or working with channel partners on special pricing packages.

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Cecilia Amador de San José

Cecilia Amador de San José

Cecilia Amador de San José, Senior Associate Editor of Allwork.Space, is based from wherever her laptop is. She enjoys traveling and visiting new flexible workspaces.

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