The difference between selling one entree and another, slightly more expensive, option can come down to factors so miniscule that customers don’t even realize that these factors are having a huge affect on their purchasing decision. Understanding how pricing affects the purchasing decision can reap great benefits for your restaurant.
When a customer is presented with multiple options, such as a cup of soup versus a bowl of soup, they are forced into making a decision. This decision is reinforced by the value that the pricing places upon each potential option.
Is the bowl of soup worth more than the cup of soup? If the bowl of soup is twice the price of the cup, then maybe they’ll just stick with the cup. But if the cost difference is fairly minimal, why wouldn’t they order the bowl of soup? It’s not like they have to finish it. Maybe they’ll even share the rest with their spouse. Alternatively, if the item is a bigger salad, steak, or any other potential entree, they’ll just box it up and take the rest home.
Movie theaters are some of the most common users of this tactic, with how popcorn pricing is structured. Theaters use price sizing to their advantage in a massive way. If you’ve ever been to a theater, you’ve probably noticed that popcorn usually comes in small, medium, and large sizes. However the difference in cost between sizes can be as little as fifty cents. Ever wonder why?
The relative value between a set of items is simply a matter of perception to most customers. “It’s only one buck more,” customers will say. “Why shouldn’t I order the large?”
If a small popcorn is $7.50, a medium is $8.00, and a large is $8.50, then a customer is far more likely to lean towards the large. Compared to the prices that theaters charge for it, popcorn is incredibly cheap. According to Reader’s Digest, movie theater popcorn is marked up by 1,275%. Even though theaters would rather have customers always ordering larges, it doesn’t make much of a difference. The prices are marked up so much that it doesn’t really matter what size the customer orders – the theater still profits big time.
The good news is that this philosophy will work in your restaurant. It works for salads, soups, steaks, and even wine!
Sell More With CoGoBuzz
Leveraging advanced WiFi, SMS, and Email solutions, CoGoBuzz digitally promotes your restaurant’s menus, deals, and more – directly to customer mobile devices.
Through a one-time login to your wireless HotSpot, customers are taken to an interactive landing page, where they can check out your menus, specials, and much more. With our SMS solution, you can send automated texts promoting all of your menu’s most profitable entrees. Take advantage of a fully digital text-based loyalty program, more repeat customers, and even automatic Facebook followers! On top of that, we produce full customer profiles and integrate them with your favorite marketing list, allowing you to send emails to all of your loyal customers.
Check out the rest of our website to learn more about the many benefits of CoGoBuzz!
How do you increase sales in your restaurant? Sound off in the comments!