As the words jumped from my mouth, I knew I sounded like a crusty cliché from an old black-and-white movie.
"Turn the cab around!" I cried. "There's something I gotta see!"
The "something" was a sign outside The Bay's massive flagship store in downtown Toronto. I was on my way to an important meeting, slightly late by the time I spied the sign, but needed to stop for a closer look nonetheless.
The sign was for a chi-chi valet parking service, one which cost a whopping $35.
Despite the outrageous amount, that wasn't the reason for my interest. What was, were two other distinctive amounts under it. All together, the sign read:
VALET PARKING $35
HYBRIDS $10
ELECTRIC CARS $0
Brilliant. With those three lines, The Bay made an extreme statement, taking an environmental stance while taxing its more well-to-do clients cruising around in their Benzes or BMWs or Lexuses (trust me, if they were in Chevys or Chryslers, it's doubtful they're shelling out $35 to shop). One single service, three different prices. (P.S. I tried to take a picture, but in my rushed state, it turned out too blurry to publish. Sorry!)
I call this Social Statement Segmentation or Prejudicial Positioning Pricing. Yes, it's quite a mouthful...but things that say a lot usually are.
The Bay is not alone. One of my marketing students at McGill University sent me -- serendipitously at just about the same time I was in that cab -- this story of La Petit Syrah café in Nice, France from The Eater blog. Perhaps it's inspired by the anglicized name of the city, but the café also rocks three different price points for the same product, but depending on 'tude. A simple coffee is a jaw-dropping seven Euros. Saying "please" will drop the price to 4.25. Saying "hello" as well plunges the price even further, down to 1.40. The difference between being very friendly and standoffish is about five-fold.
As per the post from Hilary Dixler, the café owner said:
"...the tiered pricing structure started as a joke, a response to 'very stressed' and 'sometimes rude' lunch customers. 'I know people say that French service can be rude,' he adds 'but it's also true that customers can be rude when they're busy.' Apparently there has been an improvement in customer attitude."
So it's a win-win-win; customers are happier, which makes for a better work environment, and to top it off, for not one extra penny in expenditure, this little café is getting worldwide recognition.
Tiered pricing is not a new phenomenon; anyone who flies knows that there are price distinctions amongst seats on a plane, and mega differences between the same seat depending on how close to flight time you actually book it. The same goes for hotel rooms and Broadway show tickets.
The difference here is how much marketing, positioning and statement noise you can make in one fell swoop with such a tiny bit of work. In terms of bang for the buck, it's a bunkerbuster blast for a handful pocket change.
What I really love about this clever trick is that, unless you're in a price-regulated industry like wheat or milk, you have free reign to come up with your own Social Statement Segmentation price policy. You can mark-up more--or less--depending on whether your customers wear glasses, surrender their smartphones, sing a song, support a cause, or if you just happen to like their face. The only caveat: make sure your tiers are distinct and clear-cut. This is no place for grey zones.
In my first business class was back at Vanier College, we learned about the Four Ps of marketing: Product, Promotion, Place (i.e. distribution) and bringing up the rear in terms of interest, Price. Go figure that the most innocuous of them would turn out to have so much juice and power this many years later.
So the lesson of the week? In a world of marketing sameness, ho-hum promises, and outright un-trusted lies, where so much is controlled by others, you can generate a most shocking electric charge...simply by how and what you choose to charge.