How do you price your products in a way that your customers feel that they got a deal. Mind you? I am not talking about your customers thinking they paid a fair price. They have to feel that they got a deal or it was a steal to buy at that price.
The easiest way to do it is to show the alternate options available for a similar product or service and compare and contrast.
Costco does this brilliantly and in a sneaky way. Let me explain.
When you walk into their Tire store, you will notice a big board where they compare their 4-tire package with the price for similar package from their “closest” competitor Sears.
On one side they give the entire breakdown of their deal. Comparing item by item with Sears and finally they show you how much someone will save when they buy the 4-tire package. It seems like a lot of savings – about $160 bucks. Sounds enticing. The same price without the comparison may have been good or not good – no way to know because there is nothing else to compare to. Costco knows that and they take advantage of it by using the information from Sears.
Two reasons at least.
First, because they make this a 4-tire package. By showing how much more a customer can save by buying four tires, they create a classic up-sell opportunity. It would be idiotic to buy three tires when they can get four almost for the same price. But how about buying two tires? Just for the price of one more tire, they can replace all four. So why not is how it makes you feel.
Second: Closely observe the board. The board is painted but the tire prices are handwritten. Why? Simply because the day Sears prices change and is no longer attractive to compare to them, they can easily replace them by choosing someone else to compare to. A bit sneaky there 🙂
Have a great day.