Calvin Klein's Dad's Deal
In March 2003 Calvin Klein sold his fashion empire for $400m. In the Red Bull lifestyle mag, I learned what drove him. Here’s the cracking insight which he credited with shaping his pricing policies;
As a young child he hung around his father’s grocery store in Harlem.
“I would see grapefruits … and some of them were 29 cents a pound and others were 49 cents.
I asked ‘What’s the difference between the two?’
My father said,
‘some people like to pay 29 cents and other people like to pay 49 cents’ “
Offering a number of bundles can often make the difference in solution selling. In this instance, there are two. They appear to be the exact same product. I wonder if in reality though, they were? If indeed this was the case, then a sublime piece of marketing appeals solely to the mentality of the buyer.
Alternatively, the two bins could have been split according to all sorts of measures, such as colour, shape or size.
Either way it’s a telling reminder that, provided you don’t bedazzle the punter into decision blindness by offering too many options, offering just one extra choice, no matter how small the difference, can lead to greater profits.