Did you pay more for your donut than the previous customer did? Why?
Let’s assume for a moment that you’re like me. (Sorry about that.) On your way to work in the morning you stop at your local convenience store for a cup of coffee and a donut to go with it.
Looking at the donuts in the display case, you see they’re priced at two for $1.50 or $0.89 for one. You have promised yourself to be more careful about how much you eat, so you decide to buy just one.
Now, imagine the customer ahead of you made a different choice. She bought two donuts.
Notice what’s happening here. Even though she’s spent more money for donuts than you’re about to, she paid less per donut.
At $1.50 for two, she paid $0.75 per donut. But you, with your single donut in hand, are about to pay $0.89 for the same thing.
Why’s the convenience store charging her less per donut than you? It’s not because of a cost savings to the store.
The store knows some buyers are more sensitive about the price of donuts than other buyers are. They’re making the buyers who are sensitive about what price they pay prove it by buying more. The lady before you got a better price because her choice to buy two donuts signaled she’s more price sensitive.
How could you adopt this tactic in your own business — making people buy more to get a lower price?
Read more in How to select the right type of quantity discount.