Remember the Big Gulp?
When I was in college, it was the ultimate thirst quencher at the local 7/11 convenience store.
Back then, 32 ounces seemed like a honkin’ big drink.
Nowadays though, the Big Gulp is a wimpy little cup. There’s the Super Big Gulp and the Double Gulp, for example. Some stores have a mongo-sized plastic cup (a wanna-be cooler actually) that holds 90+ ounces. These days, they probably have 256 ounce Quasimodo Gulp, and an even bigger cup with little wheels on it because it’s too big to carry.
But I digress:)
It’s the same at Mickey D’s. In the olden days, you could get a cheeseburger, fries and a drink. Today, there are 417 possible combo meals in somewhere between 3 and 4 sizes (tiers) depending on whom you ask. These options don’t exist because they like to confuse their staff (or us), they are there because there is always someone will upgrade and because they’ve measured enough response in test markets to know what to expect nationwide.
Tiers are the secret weapon that smart businesses use to add profit to the bottom line and take care of that special customer who wants a little more. The secret lies in what the big ticket tiers do psychologically.
They turn around the sales process and make the guy want the bigger tier more because they don’t want to give up the little trinket that only comes at that level. I’m not talking about the guy who wants the 12,000 calorie 7 patty burger instead of the 4 patty one with only 8,000 calories because it comes with a 32 ounce glass of hot fudge. That’s always an option cuz some yutz will buy one and you already have the burgers cooked.
Instead, we could be talking about window treatments, legal services or a car wash. Lawn mowing, oil changes and dry cleaning.
Tiers allow you to advertise a higher price for a bigger pile of goods and services and then practice “takeaway selling”.
It can be hard to get a customer to add items to an order, but they really hate to remove things from an order.
The window treatment shop would start at full-bore, just like everyone else should. Their biggest tier includes delivery and installation, quarterly checkups for wear, tear and safety, a 10% discount on upgrades for orders placed in the next century, a lifetime warranty, semi-annual cleanings for the first year, oh yeah, maybe even some blinds.
Maybe the next tier down removes the semi-annual cleanings and the 10% discount.
Some people could care less about those, others – like people who travel a lot, or whose main home is out of town – might find the professional cleanings just what the doctor ordered.
The next tier might remove delivery, installation and the quarterly checkups. Some people don’t need them. Others wouldn’t dream of using them. But some would be thrilled to press a button and make it so (apologies to Star Trek’s Jean Luc Picard).
Take away some pieces as the tiers (and price) steps down and suddenly, those little upgrades are more valuable than the blinds. The customer is resisting the urge to cheap out because they want pulls with the polished brass spurs with the little Dallas Cowboy emblem on them, rather than the perfectly functional steel ones that are plain.
My experience tells me that anywhere from 5 to 20% of your clientele wants more than you currently offer them. I also see a change in clientele when these options appear. Better clients show up because you suddenly offer what they want – something you never did before. There’s only one way to find out, if you have the gumption to give it a whirl.
Add a tier with a better product and/or better service at a higher price. See what happens. You might get a pleasant surprise.
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