Good-Better-Best Pricing: Would You Pay More for "Better"?

Posted by David Broadbent on Mar 1, 2018 1:19:38 PM
David Broadbent
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Good-better-best pricing is everywhere. Companies often offer choices on just about everything from all-organic ingredients, to cable bundles for sports fans and those for movie buffs, or pay-in-advance hotel reservations.

Car makers are kings of good-better-best. Airlines offer economy, comfort, and first-class seating options, plus add-on services. Bars have been at this for years, with rail, call, and top-shelf libations.

This is old news: customers accept good-better-best.

Yet, you may have a riot on your hands if the options are ‘irrational’ or unfair. Take for example, the recent commercials Burger King ran to explain net neutrality using Whoppers as props. You can see one for yourself here.

The ad shows Burger King employees offering three Whopper prices. Basically, the faster you want your burger, the more you pay. Willing to wait? You pay regular price. Want a burger now? That’ll be $26.

You can imagine how customers reacted to a $26 Whopper. To say they were unhappy would be an understatement.

Ok, it’s just a commercial. No fast food chain would price that way. They know better.

Wait a minute - customers pay more for faster service all the time. Think about your last Amazon purchase. Want your stuff faster, pay for faster shipping. Willing to wait? Choose free delivery. There are clear fences between options. What you give makes sense for what you get. Waiting for a burger or forking over more does not. Even worse, waiting while people get their orders before yours is just adding insult to injury.

Now using mock burger prices and online order delivery options may be a dubious comparison. But there are a few takeaways here: 

  • You can have premium and basic offerings. Make sure there are clear fences between offerings. Keep it simple and prevent as much confusion as you can.
  • Deliver on what you told customers to expect. Yes, they will pay more for add-ons and extras. If they don’t get something or if it seems irrational, they will cry foul.

One last thing: go watch the Burger King net neutrality add on YouTube. The customer reactions are priceless.

Topics: Pricing with Confidence, Selling with Confidence