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:)
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.
The next tier might remove delivery, installaton and the quarterly checkups.
Take away the 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 the polished brass spurs with the little Dallas Cowboy emblem on them, rather than the perfectly functional steel ones that are plain.
Add a tier at a higher price. See what happens.