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Tip Of The Day - 9/13/05 - $5 Milk Shake

Discussion in 'Industry Surveys & Polls' started by Sean Adams, Sep 13, 2005.

  1. Sean Adams

    Sean Adams LawnSite Gold Member
    Posts: 3,597

    I was reading a marketing book last night and there was a section about price perception. I am not saying I agree or disagree with the author, but he believes that the higher you price a service the higher regard the potential client will have for that service. He used the example of Pulp Fiction...

    When John Travolta and Uma Thurman go to the 1950's style diner they order food - Travolta orders a burger and vanilla coke and Uma orders a "$5 milk shake". Travolta is shocked that it costs that much - he even asks the waiter if "bourbon is added to that shake"...

    When the shake arrives travolta asks if he can have a sip of the shake. The author says that if it were a $2 shake travolta wouldn't be interested, but because it costs so much he was intrigued and wanted to taste it. He says that high pricing not only intrigues the prospect, but it will tempt them as well.
  2. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    when johnny sips it, and realizes it tastes just like a $2 shake, he'll never buy one. the $5 milkshake stand, don't stand a chance.
  3. fourseasonlawns

    fourseasonlawns LawnSite Member
    Posts: 52

    I disagree. Compared Fudrucker's prices to McDonald's 99 cent menu lately?
    Compared Ferrari/Lamborgini to Corvette's lately?
    What happened to the el'cheap'o YUGO. This was the vehicle EVERYONE could afford, yet NO ONE has one.

    I would rather do 20 lawns at $35 ea for $700, rather than 30 yards at $25 ea for $750.

    20 lawns at $5 ea cost me $100 out of $700. Leaves me $600.
    30 lawns at $5 ea cost me $150 out of $750. Leaves me $600.

    Right, wrong, or indifferent?
  4. bobbygedd

    bobbygedd LawnSite Fanatic
    from NJ
    Posts: 10,178

    if someone can buy a shake, for $2, that tastes EXACTLY LIKE the $5 shake, why would they buy the $5 shake? they may buy one, or share one with a friend, but the end result would be them going back to the $2 shake?
  5. fourseasonlawns

    fourseasonlawns LawnSite Member
    Posts: 52

    I try to pick my customers that don't want to just keep up with the "Jone's". I'm trying to find the "Jone's".

    Who in the world wants a $5 coffee from Starbucks? If you're not concerned about paying $5 for coffee, you're not concerned about paying $35 for lawn service when the competition is charging $20 or $25.

    It's all about social status. If the Jone's down the street are buying Ferrari's, and stop every morning at Starbuck's drive-through on the way to work, others in the neighborhood are going to try and keep up with them.

    I gained an account the other day simply because he was the only one on his street that mowed his own lawn. It's amazing how people just want to fit in with others.

    Point is, If you can entice the "Jone's" into your business as a regular customer, you can't fail. Sure, you can't have everyone, but everyone can't keep up with the "Jone's".
  6. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900

    Taste does not matter, the key word is PERCEPTION ! If a customer perceives the idea that there getting a great $ 5 shake then it will be in there eyes a great $5 dollar shake. If you are doing your job of selling it as that great only you can supply $5 shake when all the competition is selling is the ordinary, run of the mill $2 shake, it leave a customer with a only 2 choices
    #1 go with the only guy that can supply the best
    #2 choose one of the ordinary guys from the pack that give the same results as most anyone else

    As was pointed out not everyone can afford the extra expense of the $5 shake but it only takes 1 of them to make up for 2-1/2 that can only afford the ordinary "shake"
  7. Nosmo

    Nosmo LawnSite Bronze Member
    Posts: 1,216

    I was in Las Vegas last October and a group of us went into the Harley-Davidson restaurant for something to eat. Didn't order a $5.00 malt but -------------- I had a hamburger, french fries and a coke. Can't remember the exact amount but it was just under $19.00 not including the tip. One of my friends had a soft drink and a chicken fried steak and his tab was about $35.00. I wasn't curious about how his steak tasted though. :D
  8. olderthandirt

    olderthandirt LawnSite Platinum Member
    from here
    Posts: 4,900

    Not curious? Was it good or did he complain about it ??? Vegas you can eat for next to nothing in most casinos but yet you choose to go to a place that charges quite a bit [$19.00 for a burger] Why? convience, I doubt it you went becoase you wanted to go to the only place that sells Harley burgers, The Harley Diner. You could have left when you seen the prices and went and had a steak for $5 but you WANTED to be there. Marketing is why you went and why you stayed. Can't get a Harley burger at a yamaha dealer. :p
  9. Nosmo

    Nosmo LawnSite Bronze Member
    Posts: 1,216

    You're right we could have left but we wanted to eat there.
    You were right about the casinos prices but things have changed and they have wised up about food prices.

    No more 99 cent breakfasts that I know of. The smorgasboard was about $8.00 for breakfast at Circus Circus. But what the heck -- it was a vacation and everyone expects to spend while on one.
  10. SproulsLawnCare

    SproulsLawnCare LawnSite Senior Member
    from IN
    Posts: 365

    This is the honest truth. I used to sell those $5 shakes (or real close to that price) at my families restaurant. Most of the people in town would come to our restaurant because we had "the best food and ice cream in town". We were also the highest priced place in town! Not only that, but several of our customers drove app. 30 miles to have our lemon flavored soft serve ice cream when an ice cream stand in their own town was selling the exact same product from the same supplier. They PERCEIVED that ours tasted better!

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