Sunday, February 12th, 2012
In my previous blog, Pouring profits, I posed the question: “How have you observed businesses capitalizing on (or forfeiting) opportunities to capture revenue and increase profit by offering customers enhanced service experiences?”
While the post received a fair number of clicks, there have been no responses to my question. Undeterred, I resolved to identify my own example and found one at my local Albertsons supermarket:
Albertsons offers two prices for fresh salmon in its seafood case: one price for unseasoned and another (higher) price for seasoned salmon. There is a valid reason for charging more for the seasoned fillets. Not only is it more convenient for the customer, it saves her from having to buy the ingredients required to season the fish.
Sure, offering seasoned salmon fillets for no additional charge would add value but it doesn’t make good business sense because there are labor and materials costs associated with seasoning the fish.
If I were advising Albertsons, I’d advocate charging more for the seasoned product and add value by offering a complimentary recipe for the “secret seasoning” at the store’s website. This way, if customers enjoy the seasoning but do not want to pay a premium for it at the seafood counter, they can purchase the ingredients to make their own seasoning—presumably, at Albertsons.
We know from the data that customers will pay more for enhanced service experiences: 13 percent more according to one survey.
Freebies are nice but you have a business to run. So don’t give it away when customers are prepared to pay.
Care to comment? It’s free!