Tip:
Highlight text to annotate it
X
I want to spend 90 seconds talking to you about a clever marketing ploy.
A ploy that actually increases your margin, while leaving customers thinking they're getting a good deal.
And it centres around discounts for buying in volume.
Have a look at this menu: two different sized drink offerings. The small is $2, the large $5.
Now we're all conditioned to think that the large offers the best value for money. So, if customers are thirsty, they may well opt for the large.
Now a smart shopper - and thankfully for retailers, they're in the minority - won't assume the large offers the best value; they'll ask what the volume is of each cup and do the maths themselves.
As you can see, the large is twice the size of the small and yet it's more than double the price!
The customer would've saved a dollar by buying two smalls. But most people are too lazy or too stupid to bother asking the question, and hence they get screwed, and they're oblivious to the fact.
This happens in supermarkets too. Take a look at the price of this 12-pack of soft drink, and compare it to the 36-pack price.
The retailer is laughing every time a customer buys that 36-pack, because they're paying too much!
They should have bought three 12-packs and saved money.
Some say it's deceptive, I think it's clever. And if the general public is too darn lazy to do the math - it's their fault.
And besides, they're unlikely to ever realise they've been stung.
So when you price up your products or packages, bear this example in mind.
By going against the trend of offering discounts for greater volume, you could be skimming a couple of percent more profit on each sale.
And at the same time, putting a smile on your customers' faces.
I'm Kym Illman and thank you for watching.