My tire got a little bit low the other day so I stopped by the local gas station for a fill-up. Here’s what I found.
Yep. $1 for air.
Obviously that price is over the top for me and I’m guessing you as well. Sure, I MUST have the air, and they know that, so they can charge whatever they want, however, to me that price is outrageous and I’ll never go to that gas station again because of it.
There are a couple of points at work here.
#1: Luxury vs. Need
There is a definite difference between selling luxury items and need items and how you can price them. I NEED gas to get to work. I NEEDED air so my tire wouldn’t pop. When you’re selling needs, you can price pretty much how you wish, assuming you don’t have a competitor offering a lower priced choice. Because of this, I was forced to pay the $1.00 to get my tires filled up, even though I believe the price was too high.
The other side of this equation is selling luxury items. Water is a need, but bottled water is a luxury item. In other words, you don’t HAVE to have bottled water, but it’s nice to have. In this example, the people who sell bottled water can again charge way too much for something we don’t really need to have.
Are you selling luxury or needs? Really think about it. Then price accordingly. But be careful, read point #2.
#2: It’s Easy To Create Customer Evangelists & Even Easier To Lose Them
Just because I paid the $1.00 for air does not mean the gas station wins. In fact, they lose, big time. I will now purposely not go to that gas station for gas or food or drinks or anything, ever again. Why? Because they’re greedy. Why not make the air free? It’s air! If the air was free I’d remember that and make sure to go there more often. I’d buy my gas there and other things. I’d always remember that they gave me something I needed.
Think about the little silly things you charge customers for that you should probably be giving away for free. The barber should probably include the hot straight-razor shave at the end of every haircut. The restaurant should probably make kids drinks free instead of $2.99 on top of their meal.
Consider these examples:
- What if a restaurant charged for salt/pepper and ketchup and mustard?
- What if your mechanic charged you to read the magazines in the lobby while they changed your oil?
How much money are you really making from selling these extra things? Isn’t it possible that your customer is wondering why you’re trying to gouge them for every single little thing? At what point does your customer get fed up with this system and decide to take their business someplace else? How much revenue will you lose long-term because you’ve lost that customer?
These are important questions and thing to consider. Don’t charge $1.00 for air.