Good Better Best pricing works. It works so well that it’s still being studied today – by the organization like the Harvard Business Review in the most recent case. And that’s what inspired this Episode of the Custom Apparel Startups Podcast.
What is Good, Better, Best (GBB)?
It’s a strategy to offer 3 levels of products. Each containing different features and coming at a different price. “Good” being the minimum level your brand is willing to offer, “better” being an upgrade at a marginal price increase, “best” being the highest level your customer base would be willing to spend on apparel.
What are the GBB approaches?
Offensive plays aimed at generating new growth and revenue
Defensive plays meant to counter or forestall moves by competitors
Behavioral plays that draw on principles of consumer psychology.
Moves away from Binary (A or B) (1 or 0)(e.g. my way or high way) “Buy / Don’t Buy” to more choices, gives the customer a sense of empowerment rather than an ultimatum.
Customers tend to decide more quickly. They focus on what they want, rather than just deciding to buy
How to make a GBB?
– Consult apparel suppliers
– Ask customers
– Look at old orders
– Compare to other businesses
– Look at big brand online stores
Get out and figure out how to add Good Better Best to your sales process!
Welcome to the Custom Apparel Startups podcast, your best source for information, news, tips and tricks to get you off the ground running, and earn success with your custom apparel decorating business. So, get ready to soak up some knowledge!
Now, here are your hosts, Mark and Marc!
Mark S: Hey everyone, and welcome to episode 84 of the Custom Apparel Startups podcast. My name is Mark Stephenson, from ColDesi.
Marc V: And this is Marc Vila, from Colman and Company. Today, we’re here to talk about “Good-Better-Best,” and what Harvard does know about selling t-shirts.
Mark S: Which is nothing. No one at Harvard has ever sold a t-shirt. But we’ve got a great article about that “good-better-best” kind of pricing philosophy, inspired this podcast.
Marc V: Yeah. This is about making more money. It is about selling better to your customers. It’s about empowering your customers to make good decisions, and it’s about besting your competition. This good-better-best strategy is not just – you don’t see it everywhere, by accident. It’s on purpose.
Mark S: By that, what we mean about good-better-best is just like you see on most websites in every retail environment, you’re offered more than one choice for a product. You get a good product at a lower price, you get a better product at a medium price, and you get the best product at a significantly higher price, usually.
Marc V: You see it, oftentimes, when you’re online shopping. You see it all of the time. It’s very typical there, where they’ll see three kind of columns, typically. That’s a very typical thing.
Mark S: You know what? Because we are videoing this, if you listen to us, that’s great. We really appreciate that. But we also publish these podcasts on YouTube. Our sponsor for today is the Custom Apparel Startups on YouTube.
You can find the podcast at the ColDesi-Colman YouTube channel, as well. I’m holding this up. We would really like you to comment, by the way, and share those YouTube videos. I’m holding this up. Maybe we’ll put a picture of it in the show notes.
But basically, you can recognize the three columns. There’s a good price for software, there’s a better price for software, and there’s a best price for software. They do that because it works. Because on average, you’ll make more money by giving people choices, than you will just by one.
Marc V: Yeah. You’ll see it if – the next time you get your local flyer, that ValuPak, anything like that, you’re local newspaper, you’re going to find a lot of companies that offer services. Like carpet cleaning services and floor cleaning, and all of these.
Oftentimes, you’re going to start running into the good-better-best. They might highlight one in a different color, showing it’s the best value. However they do it, they’re doing this because it’s a strategy. It improves customer service. It makes people feel better buying from you, and you make more money. You will actually increase your income, and you will best your competition by doing it.
So, we should probably start with the definition that we wrote, of good-better-best.
Mark S: Yes, go.
Marc V: Okay. I’m going to pick up my notes here.
Mark S: Folks, we take minutes in preparing these podcasts!
Marc V: Okay, what is good-better-best? It’s a strategy to offer three levels of products, each containing different features, and coming at a different price; good being the minimum level your brand is willing to offer.
Better being an upgrade, at a marginal price increase. And best being the highest level your customer base would be willing to spend, and specifically here, on apparel.
Mark S: I like that a lot. Because just like you said, you’ve got a good offering that some of your customers might be satisfied with. If they are very frugal, they might choose that product.
You’ve got the better one, that is actually a pretty good value. And then, you’ve got the best one, to kind of set the mark for what a high price looks like.
Marc V: Yes, and it’s important. When we wrote this down, and it said “good being the minimum level your brand is willing to offer,” that’s why it’s called good-better-best.
Mark S: Because it’s still good.
Marc V: Yeah. It’s not called “cheap-middle price-expensive.”
Mark S: And don’t push it that way, either.
Marc V: Even though that’s kind of what it is. But the reason why it’s good is because you still want to make sure that you’re representing your brand. So, if you’re just talking about the quality of the blank apparel that you’re working with, there are plenty of our customers that we talk to, where they won’t offer the cheapest t-shirt they can purchase through their supplier.
That’s below their brand standard. “I start here,” which is maybe the third or the fourth most expensive shirt. That’s their “good.” So, your “good” needs to be the minimum quality of not only the garment, but the decorating method. And there’s a bunch of other value propositions we’ll get into.
Mark S: Absolutely.
Marc V: And then, the “better,” in this article that you had read, which I think you’ll mention, and we’ll put in the show notes, talks about these specific lines that you draw.
“Better” is going to have very specific upgrades to it. It makes it better, there’s more value in it. It costs a little bit more, but if it’s priced right, then the customer should look at that and really see “Oh, this is better. This seems like a fair deal.”
And then, the “best” is really just the best. It’s the highest name brand, you offer a special warranty, whatever it will be.
Mark S: I’m going to say this early, because I think one of the reasons – we’re going to talk about reasons why to employ this pricing policy – but there are a couple of things that we hear about in the Custom Apparel Startups Facebook group, when we do surveys all of the time, is this price competition thing is heavy on peoples’ minds.
They see an advertisement for a shirt that a screen printer is selling for $8 or $9, and they completely lose their minds. Even though they have never had a customer leave them and go buy that shirt, it’s still – that price is out there in the marketplace, and it’s worrying.
So, this is a great defense against that. The example that I’ll bring up is, the early days of good-better-best was actually in the car business.
Marc V: Oh, yeah. I like this a lot. It’s a good story.
Mark S: When Ford first developed the car, and they were selling cars when they were the only car company, you could get whatever color black you wanted. Right? The Model A and the Model T and the early Fords came in a color, and there was only one of these models.
When General Motors came out and they looked at the dominance that these guys had in the marketplace, they gave people a choice. They came out with more than one brand of automobile.
You’ve got, let’s say – I think it’s Chevy, Pontiac and Cadillac. People could choose. You could get something that was very much like that basic Ford. You could get a next level up, and then you could get the best model, that had all of the luxury features.
Marc V: Yeah, which is why the saying goes “This is the Cadillac of.” You hear that all of the time.
Mark S: Nobody ever says “This is the Ford of.”
Marc V: Not often.
Mark S: And it’s been 100 years, so you’d think people would get over that.
Marc V: If you love a Ford car, which a lot of people do, it’s an amazing vehicle. I’m not advertising it. I’m just saying I don’t want to offend anybody over this.
Mark S: No, no. They’ve gotten away from that just one color, black. But if you think about it, Ford is the screen print shop down the street. All they ever offer, if all they do is screen printing, and all they do is screen printing for orders of 100 shirts, and all they do is try to get you into a single color, basically their whole business is devoted to fewer options.
You are coming across and giving them, right at the first take, the minute a customer talks to you, goes to your website, meets you in person, you’re already talking about them making a choice.
Marc V: Yes, that’s it.
Mark S: That’s powerful.
Marc V: Yes. I think there’s a couple of things that we could talk about here. For one, we get to talk about what are some different approaches of the good-better-best. And then the next, we could talk about how to make a good-better-best, as well. How do we do that?
What are the different approaches? Why do we do it, and what do those mean? And then, how do we actually create it, so we can get some actual content out there, that you folks can do?
So, when you are listening to this or watching this, you should be taking some notes. Because you have to think about how you’re going to create some sort of a good-better-best strategy, for the next time you go to sell to a customer. And it’s going to work.
The first thing, on why, I think my favorite why on why you should have a good-better-best is there are things in my life, when I go out shopping, where I just want the good, because it doesn’t matter that much to me. And there’s other things, that I want the best.
Most people are that way, when they’re shopping. Certain things, they will buy really inexpensive, because it doesn’t matter that much to them. You know, canned corn, I’ll just buy the supermarket brand. I don’t care. Tomato sauce, if I’m buying it in a jar, it’s got to be really good.
Mark S: You are literally the only person I know, that buys canned corn.
Marc V: No! You can put it in dips. There’s so many, yes.
Mark S: I get it. But you know, it goes to a lot of things. It’s what kind of beer do you drink? What kind of wine do you drink? What do you drive? For some people, it doesn’t matter what kind of beer it is, right? And for other people, man, if it’s not the latest craft beer – did you see I said beard?
If it’s not the latest craft beer that you and your other hipster friends like to drink, then you’re not going to drink it at all. So, why is that?
Marc V: Yeah. It’s really just, for one, people have different tastes in different things. So, if you are offering a pricing model and a sales model that you’re only offering one option, then you’re automatically going to lose some customers, just for the fact that they are looking for the best, or they’re looking for an inexpensive just “the good.”
And if they don’t have anything to compare to, they don’t know. So, don’t make assumptions. The point being that when you start offering better and best, you’re going to have people that just come in and just say “Best.” They’re not thinking about it.
Mark S: “That’s what I do. I just buy the best.”
Marc V: The example was, when I worked for a different company, I was given the task to get us some embroidered shirts. We were going on a big trip. There was a handful of us going, so we wanted to get all brand-new shirts. We wanted to get polo shirts.
The owner said to me, he was like “I want to get the moisture wick style shirts. I want to have them embroidered, and I want Nike.” I said “Well, they can do – they don’t have to be the Nike.” And he said “I just love the Nike shirts.”
He was like “I just think when we walk into a meeting, and we’ve got my logo next to the Nike logo, it makes us look better. I play golf, and I like playing golf in Nike shirts. And after I go to these meetings, I’m not really going to have much to wear the shirts for, so I want to play golf in them.”
So, we go there, and that was it. I spoke to the guy there, and he was like “Well, they’re going to be expensive.” “Yeah, we know.” He knows how much a Nike golf shirt costs. He goes to the sporting goods store. That’s what he wanted.
Mark S: So, price was not the determining factor.
Marc V: Yeah. It was the fact that if he was going to buy stuff with his logo on it, he might as well spend $50 on it.
Mark S: The great part, one part about that story is you already started with the expectation that Nike was what you were going to buy, so you came in at “best.” If that same situation, you didn’t come in as best, you were just looking for that shirt, and the owner didn’t specify Nike in advance, but you present him with a good-better-best, and one of those options is Nike, he’s going to go right for it.
Marc V: That’s the thing. Now, there’s a decision to be made. I text him or call him and say “Hey, economy brand, this one, Nike.” The response would be Nike. He would have responded and said “Nike.” However, if I would have just gone in, and there was no question about it and he didn’t think about it -.
Because he had thought about it, before. One reason he had thought about it was because I had sold embroidery machines for a while. So, I knew a little bit about the business, and I said “Hey, you can buy lots of options.”
But oftentimes you go in there, and you just get one quote. “I need three shirts.” “Okay. Here it is. $25 apiece,” or whatever the number is.
Let’s talk about some good-better-best approaches. This is from the article. What is the name of the article, by the way?
Mark S: The article is – see, I have an arts and crafts project in front of me, because I’ve cut things out. The name of the article is “The Good-Better-Best Approach to Pricing.” It’s by Rafi Mohammed, from the Harvard Business Review.
Marc V: It was a good article. It was really interesting. My favorite part of the article was talking about the three different types of approaches.
The first one, he says; offensive plays, defensive plays, and then behavioral plays.
Mark S: We’ve kind of been talking about the offensive plays. By offensive, you’re actively trying to get somebody to spend more money with you, by offering those three choices.
By the way, do me a favor if you’re watching this on YouTube. If you’re already using this strategy, go ahead and put examples down below, because I would really like to see what your website looks like, or a situation that you’ve been in, where this kind of strategy has worked. We’ll add that back into the show notes.
Marc V: And if you’ve thought about doing this and implemented it, we’re very curious on what it might have done for your sales.
Mark S: Yeah, because we’ve done this at ColDesi, as a matter of fact. We employed, on our direct to garment printer site, we decided to offer people good-better-best solutions. I will tell you that it’s very effective. Very few people pick the most basic solution. They always pick something that’s more appropriate for their needs.
I like the offensive approach, because the purpose of it is to make more money from offering kind of the same range of products, just the way you position it.
Marc V: Yeah. It’s a growth and a revenue strategy, by going out there and giving your customers a menu to choose from. The big difference here is that it’s like I said. If you just give them the one option, they’re just going to pick that option.
As soon as you start offering upgrades, and we talk about upsells all of the time, about “Did you offer the cap? Did you offer the koozies? Did you offer a second placement? Do you want to do the arm and the left chest?”
Offering all of those things are all upsells, but the shirt is also an upsell. So, the whole package that you’re offering, which isn’t just necessarily – we’ve talked about the shirt, and being the inexpensive one, the medium-grade one and the brand-name one. But it’s also about other features.
Mark S: Yeah. The article has a nice list of things that you can use to add value to – see? I’m holding up more things that I’ve carefully torn out of the article. The things that you could add to the good-better-best, it doesn’t have to be a better quality garment. It could be an add-on, like Marc said. It could be a package of a shirt and a cap, or a shirt and a cap and a koozie, or something along those lines.
But it could also be something about service. It could be faster delivery time. “In the better solution, we have a two-day turnaround. In the good solution, it takes about ten days, because we can more easily fit you into the schedule.”
It could be the brand that differentiates it. It could be the flexibility. If you’re doing digital prints, maybe you offer smaller or larger sizes as part of your good-better-best. Like maybe the standard size is a 10x10, the better size is the 11x11, and the best is 14x14.
There’s a variety of ways that you can look at this. All of them are designed to saying “Okay, yeah. It’s $20 for the good shirt, but look what I can get for the extra $4.”
Marc V: Yes, and it’s also all of these little other value-adds. For example, if the garment you know that is the better quality one is a pre-shrunk, but it’s a good pre-shrunk, meaning that you bought it, you’ve tested it and you’ve washed it, and it really almost doesn’t shrink at all, you can offer like a no shrink guarantee, and that can be part of it.
Mark S: That’s great!
Marc V: Say “Hey, if any of your shirts shrink by” however you want to make the rules, but “If they shrink by a certain amount, then come on in and I’ll replace it for you.” Because you know the garment that they’re choosing in this best or better category performs really well that way.
You can offer no fading in the color. Typically, you get like a green or a dark blue or a black shirt, and it fades out, if it’s a cheaper shirt. The better ones don’t do that. You can offer a no fade. Offer up to this many months, where the color is going to stay the same.
However you want to do it. There’s a lot of great value you can put in there. It’s a way of generating more revenue, and it’s kind of simple. Right? If you mark everything up by a certain percentage, oftentimes what a lot of people do in the apparel industry is they charge double the price of the apparel, and then they charge for the decoration.
That’s one strategy people do. It’s a common one I hear about. If that’s the case, if we’re talking about like golf-style shirts, if it’s an $11 one, you’re making $11 profit on the garment. If it’s a $22 one, you’re making $22 on the profit. If it’s a $30 one, you’re making $30 on that.
Mark S: So, you accelerate exponentially, the amount of money that you’re going to make, when people choose the better and the best option. And they’re going to do that. Statistically, you can read in the article, many more people will chose the better or the best. Very few people will choose the good.
Marc V: It’s so true. And when you go in for just a price strategy right away, somebody calls up and you don’t offer them that, they only have the opportunity to say yes or no to that. And their good-better-best comparison is versus your competition.
Mark S: Right.
Marc V: The next one has to do with competition. It is the defensive play.
Mark S: I like this a lot, too, because it’s just like the screen printer conversation that we had earlier.
Marc V: What happens is you find out somebody sells shirts for cheaper, and you make a decision of “What am I going to do? I’m going to lower all of my prices by 15%, so I can compete.” But with the good-better-best strategy, one of the things you can do is you can take your good, and you can reduce down the quality of that good, and the price, to have a lower competitive price to start with.
Maybe it’s a lesser expensive piece of apparel, or maybe you reduce the amount of stitches that is the amount of stitches you allow for this price, for a left chest logo or whatever it is. You reduce the amount of colors, if you’re doing heat transfer vinyl. You used to offer it at three, but now you only do a single color at that price.
You bring that good down, but then you still have your better and your best upgrade. So, you’re price competitive versus your competition, but you still have that upsell opportunity, and you’re giving the choice to the customer, rather than walking away, or just attempting to lower all prices.
Mark S: And you still don’t have to match what your competition is doing. It just lowers it to closer to that, so you’re more in the ballpark at the good level, versus the competition.
One of the good examples I think they used in the article was when gyms first started to be 15 on every block. Right? You can join a gym for nothing, now. That transition was tough for a lot of gyms.
So, when a new gym would come to an area, that was offering like $10 a month for training and for all of the features that you get, the existing gyms would do things like they would offer a lower price, but they would leave out towel service.
Or they would leave out the classes. They pared down their regular offering, so they could bring their products closer to the good offer that their competition was offering.
Marc V: And it’s great. That all plays into not only the money and lowering some prices, and offering something different, but still having an upgrade, but it flows right into the third one, which is the behavioral play.
Mark S: It could be my favorite.
Marc V: Really, this is for you and for the customer. One of the things mentioned in here has to do with psychology. We’ve had some podcasts in the past, where we talked about psychology in selling and persuasion. Go back and listen to those. I love that kind of stuff. It’s really interesting.
One thing that they say is that they move people away from a binary decision. A binary decision means it’s either a yes or a no. Binary is one or zero. It’s my way or highway. It’s one or the other. People don’t like these types of decisions.
People don’t like decisions that are just binary, where they just have two things. “I can get all of this or I can get none of it.” It’s uncomfortable to make that decision, because you feel like you almost don’t have a choice, and that’s very uncomfortable.
So, what you do is when you provide the good-better-best, you put the power back into your customer’s hands. Now it’s not about the decision “Do I buy or not?” The decision is “Which one of these do I buy?”
Mark S: Yeah, and that’s especially powerful when you’re up against competition that only offers one thing. For example, if your customer just got off the phone with somebody down the street that’s offering transfers. They’ve got this limited set of transfers, limited number of colors. They ask for a price on 14 shirts, and they say “Here’s the price.”
Then, they call you, and they’re saying “Here’s what I want to do. I’m looking for 14 shirts. What’s your price?” “Oh, well, I’ve actually got a couple of options for you. You can get this product for a similar price to what you’re getting down the street. I’ve got a better solution, that I think might work for you. And then, I’ve got the best, which includes things like the Nike brand and things like that. Which one do you want?”
Marc V: I just think this is so important, giving your customers this power, because especially now, when it’s so easy to shop for things. It’s easy to get anything. When you’re getting into this with your customers, and you’re talking with them about giving them the options, and you put the power back into their hands, that’s where the consumer feels comfortable.
The consumer now really feels comfortable being “I decide where I’m going to spend my money. I decide which one I want. I don’t want to be sold on which one to get.” People don’t like that.
Mark S: I think that’s a really good point, is people don’t want to be sold. So, if you only give them one option, then they are just going to make a yes or no decision. But if you offer them the three choices, then they just feel like you’re giving them options.
Marc V: And you really are. The way I would propose it would be something to the effect of I really care that my customers like what they’re getting, and I know that part of choosing the right apparel all of the time, and it doesn’t matter what you’re buying, whether it’s shoes from the store or t-shirts at my shop, it’s a combination of price and quality and longevity, and all of these things.
I really care about my customers, so I develop a few most popular kind of niches that I put these into, and this is what I consider my good, my better and my best. This is what people really like. “What’s good for you? You tell me what’s good for you.”
Then, you put it in their court, and they get to look. They look at it and they see “Oh, I like that this one goes on the wrinkle-free shirt. I hate ironing.”
Mark S: That’s a big deal.
Marc V: Now immediately, the good is gone, because they see that the good is not wrinkle-free.
Mark S: Yeah. In the article, they talk about that as a fence. I kind of like using those technical terms. The fence there is you’ve got something that’s wrinkle-free or not wrinkle-free. Someone is going to buy that, right? And they’ll pay more.
Maybe it’s even a $2 difference or a $4 difference in a shirt, but “I only buy stuff that I don’t have to iron.”
Marc V: Yeah. I do.
Mark S: There you go. So, it’s wrinkle-free, or I’m not buying it. But you’ve still offered them the selection. I think one place to look at this is if you look at custom apparel websites, not necessarily the big ones like Zazzle or Café Press, but maybe even your own, if you sell online.
What you’ll see is you’ll have the opportunity to pick a design. Then, you’ll pick the style of the shirt, and then you’ll pick the color. By the time you get done – after you pick a V-neck, for example, in a ladies T, the only choice that you’re offered from then on is a color. So now, I can get one of these colors, but I’m not offered anything more expensive.
So, you’re really not giving a good-better-best. You’re giving the customer some nice options, but once they’ve picked a $20 or $25 configuration, you’re not presenting them with a possibility. He says “Well, I’ve got an extra $10 to spend, but you’ll never know, because you didn’t ask me for that.”
Marc V: I like the idea of when you’re doing this, and you’re giving your customers the options, some of them are value options. You offer a no shrink guarantee, or a colorfast type of a guarantee for a period of time. You offer the wrinkle-free. Stain resistance, as something else, like that won’t fade. All of these things.
You have to think of the values you can put in. Then, part of the upsell, maybe not even necessarily – they don’t know the difference between District and Next Level and Bella, and all of these brands. This is words we use.
So, when you’re selling to them, you just sell “This is the one that’s fade-resistant and wrinkle-free. This is the one that’s all of it. This is the one that’s got moisture wicking properties. This one is 100% organic cotton.” You offer these, and these are what they’re choosing.
And if it’s online, if you build your store online, you let them choose the garment that way. It starts off with like standard cotton, organic cotton, wrinkle-free blend, moisture wick.
Mark S: And you can use kind of a feature/benefit statement like that, or you can even just use descriptive terms like “premium.” Like “I have a standard brand shirt, I’ve got a premium, and then I’ve got the really high-end.”
And if you talk about premium, it’s just like if you’re booking a hotel room. You’re going too pay more, if it says the word “suite.” Right? It doesn’t matter if the room is any bigger. But man, if it’s a suite, that’s where I want to stay. I don’t want to stay in a hotel room. I want to stay in a suite.
This kind of wording, and these kind of options, you can offer your customers. And maybe not the first day, but within a very short period of time, your average sale is going to drift up. It’s the same amount of work to embroider on a $50 Nike polo, and make more money, as it is to embroider on a $15 generic.
Marc V: Yeah, whatever the generic is. That’s the key to all of this, is that for the same amount of time, you are able to make a higher revenue. Your customer is happier, because they got to choose a premium product.
I mean, let’s just be honest. When a shirt is nicer, you like it better.
Mark S: True.
Marc V: That’s just it. It doesn’t matter what it is; shirts, shoes, socks. Whatever you have, if they’re nicer and they’re more comfortable, you like them better. You keep them longer. They last longer, and your customer is going to be happier.
Everyone has got those t-shirts or the shoes, or whatever it is that they own that’s apparel that’s of a better quality, and they like wearing it. And the stuff that doesn’t feel good or is uncomfortable, or is shrunk, they’re not going to like.
So, you’re helping yourself by making more money, and you’re helping your customer, because they’ve really got an opportunity to choose something amazing.
Mark S: Absolutely.
Marc V: This comes into asking questions. We talked about it when we sat with Monte. If you didn’t listen to that, you ask customers about “Is it going to be outside? Is this a single time event? Okay, it’s for your warehouse crew. Are they customer-facing?”
“Will you provide the apparel? Okay, so they’re customer-facing, they have a logo on it. How often do you replace them? You replace them every six months? Okay.”
You want to get a shirt, then, that they’re customer-facing, so you want the shirts to not really stain or look bad. You want maybe moisture wicking material, or at least something – a cotton that is like a nice quality cotton, so they don’t have pit stains and stuff like that. You add all of this up, and then all of a sudden -.
Mark S: That’s some compelling sales copy, by the way. “Pit stain free.”
Marc V: Yeah! You don’t want your staff coming to a customer, delivering them something from the warehouse, and I’m not talking about sweat. We’re talking about pit stains.
Mark S: I understand. Let’s not talk about that anymore.
Marc V: You want them to go there. One of the examples we talked about was if you’re dealing with like a luxury boat dealer. You start asking them these questions. Then, you say “I do offer an Adidas or an Eddie Bauer shirt that I can provide. I’m sure that when your customers come in, you want a level of prestige there.”
So, even if the people who are just kind of washing and waxing the boats are wearing an Eddie Bauer brand shirt with a logo on it, that’s going to provide prestige for them. That’s the best.
The owner might be somebody who says “No, I don’t care about that too much.” Or they might look at that and say “Yes! I can’t believe I never even thought about that!” And they’re going to be thanking you for the good-better-best.
Mark S: I like that. Now, one thing that I don’t know where it fits, we didn’t talk about, is I love your popcorn example that we were talking about. It’s kind of re-framing the price discussion.
Marc V: Actually, I think it fits kind of in this spot. The next note we have here is that customers tend to decide more quickly, when they’re given a good-better-best, because it’s not the binary decision. They’re not making this thing “Do I do it or do I not do it?” They just kind of get to flow in, and “Alright. Which one of these do I want?”
So, I think the popcorn kind of falls into that, because if you have one size of popcorn at the movie theater, and it’s $8, you are just “What? How is it $8?”
Mark S: “I’m not going to buy any popcorn!”
Marc V: For like a nickel’s worth of popcorn. “I’m not going to do it.” But then they have, it’s $8.50 for a medium, and $9.50 for the large tub, with a free refill. Now, you’re like “Well, that $9.50 is not a bad deal.”
Mark S: But the only reason you would say that, because if somebody was standing outside a grocery store, selling boxes of popcorn for $10 -.
Marc V: There’s Boy Scouts. That’s what they do, I’m pretty sure. I think it’s like a $20 bag of popcorn. I would love to talk with them about not – just go to the cookie.
Mark S: Just go to the cookie.
Marc V: Is there a patent on Girl Scout Cookies?
Mark S: Just ask me for the money. I’m never going to spend money on the popcorn. But the idea behind the popcorn example is all of a sudden, you have re-framed the pricing competition. First, maybe someone calls up, and you’re up against competition. But you’re offering these choices.
Even though yours might start more, now your prices seem normal and regular, and they’re likely to choose the extra-large. They’re likely to choose the better or the best, just like in the popcorn example, because you have re-framed the conversation about price.
Marc V: And the reason it’s important to have good, better and best, because in making that choice – I remember reading something a while ago. I don’t recall the source, so I’m just going to pretend like I invented this idea. But, no. I don’t remember the source, but I was reading somewhere back, and they were talking about that they offered a small popcorn and a large popcorn.
And that they almost always sold the small popcorn. People didn’t feel as much of a difference, to upgrade to the big one. Then, they insert the medium, and they sell more larges, for inserting the medium.
The reason is because it’s that, what McDonald’s did for a while. Just medium, large, super-size. Because you start looking at the value of things as they go up, and the value of the good seems really, really like a really bad value, when you compare it to the better.
Mark S: Yeah. XYZ is only a few pennies more.
Marc V: And then, if I’m already at better, I should probably just go to best, depending on where you are. That’s going to be up to you, on how you price. If you go with generic, slightly better generic, Adidas brand or Eddie Bauer brand, you might have a big jump to that best.
But you’re going to have to figure out what that strategy is for you. Is it three generics? Or is it a cheap generic, a nice generic, and then a very premium? That’s going to be up to you, on where that jump is.
But you’re either going to be driving a lot of people to the better, or driving a lot of people to the best, depending on that strategy.
Mark S: There’s a lot of things I love about the good-better-best strategy. One of them is because it’s going to get you thinking about your pricing. Because if you’re listening to this podcast, if you’ve already started a business, there’s a 97% chance you’re not charging enough money.
That happens almost all of the time. People are actually embarrassed to charge a lot of money for their work for custom t-shirts, or to charge what the market will bear.
So, one of these things that I want you to keep in mind, and swear to us that you will not do, is take this good-better-best strategy, take what you’re already charging, and find two shirts that you can sell cheaper. That’s not the point behind the exercise. Okay?
It’s for you to make more money. I promise you, you are not charging too much, and that if you find a couple of higher value things, you’ll look down the road and in a month or two months or three months, you’ll realize that your average profit per order is going up. That means you’re doing the same amount of work, but you’re making more money.
Marc V: Yeah. I think when it really works is when your good, better and best is a true and honest good-better-best. You’re offering more, even if it’s just more things.
Because you said before, and I didn’t think about it until you really mentioned it, that the good is a shirt. The better is a shirt and a cap. And the best is a shirt, a cap, a koozie, and a fourth and a fifth thing; a headband, whatever it might be, depending on the difference.
So, you have like a sports package where the good is just a shirt and a hat. That’s the good. Then, the end kit is like the bleacher seat for the parent, that’s decorated, and it includes a couple of koozies. So, the best is really just a lot of things.
It’s a really good value for the customer, and you’ve got profit and margin built into all of those things. It’s not just about the quality of what they’re getting. It could be the quantity. It’s all of the above.
Mark S: It could be different types. It could be you’ve got a performance t-shirt. The next one, you’ve got a performance hoodie, and then you’ve got a warm-up jacket, or a set of each one of those. Take what you’re offering now, and make that your good or better. Then, fill in the blanks for the other two.
Marc V: I think that’s great. Then, remember on the defensive strategy, if you are really having an issue, because you feel that your pricing in the market – this is the thing. I don’t want you to feel that you’re priced out of the market.
Mark S: I was just going to say that.
Marc V: Don’t ever feel it. But if you start to get the feeling, then you start to do some research. You look around, and you really compare what is going on. Because prices change for everything, all of the time. What is going on?
So, maybe at that point in time, if you do have to offer a good as a defensive strategy, you define a new good, and then your better and your best.
But really, you’ve got to make sure that what you’re doing is continuing to offer a better value, a better product for more money, as best as you can. That is what’s going to be part of the driving factors of growing your business, with doing the same amount of work with the same amount of staff. Everything is the same. You’ve just gotten better at offering.
Mark S: I really like this idea a lot. Maybe if you want to, you’re welcome to send us your ideas for good-better-best, and we’ll take a look and help you work through that.
But I like this idea so much. If you’re listening to this podcast or watching the video, do this now. Do this on the next phone call, or the next request for quote you get.
Just put a little bit of thought into it, and give somebody the good-better-best options, and see how that changes.
Marc V: Yeah, and just keep it simple. Even if you’re “I only offer two brands.” Okay, then this one includes the hat. This one includes the koozie. Whatever it is, as simple as you can, do something that you can do immediately.
But how do you make a good-better-best? That’s what we should discuss, because if you’re going to do it next, you need to have some ideas on how to get there.
So, I made a few notes here. We both did. One of them is just consult your apparel supplier. You call up, you talk to your rep. You call them up, or however you communicate with them. Just say “I sell this shirt, this hat, this polo,” whatever the things you buy from them.
You just say “I want to develop a good-better-best strategy with the shirt, the hat, the hoodie. Can you help me pick some brands?” Just start with the apparel.
Chances are they’re going to be able to tell you, like “The one you’re buying now is what we consider a pretty good one. Here are the two popular upgrades that other companies buy.”
That’s what they’re going to tell you. Whenever you ask them what’s the best, they’re going to be talking about popularity and things. So, you can learn from them.
The story of where my friend, my old boss with the polo and the Nike – learn from your customers. Right? Your customers are going to ask for things, and you realize that could be a best.
Mark S: Yeah. They’re going to ask for a specific brand of t-shirt or a different kind of shorts, or something like that, that you don’t normally carry. You go out and find that. You’ve already got a demonstration in-house, that someone asked you for it, so you know it will sell. So, good one!
Marc V: “What was my best order?” You go back and look at it, and it’s because they did everything. They did the shirt and the bag and the can cooler and the seat and the laptop case. Then, you’re like “That was the best order.” That’s best. Write that down, and make that as a quote.
Mark S: That’s a good idea.
Marc V: Then, you can sell that to people. So, look at what orders you’ve done before.
You can just compare to other businesses. You could just price-shop your competition, even if it’s not local, in another city or town. Call up and just try to find, Google search, find websites.
Also, use retailers and stuff like that. They’re not in your competition, but if you go to like Macy’s or a sporting goods store, or something like that. You go to wherever they have a particular type of apparel, whether it’s socks or t-shirts or whatever. They kind of group it together.
Wine even, right? They group it together, like here’s the cheap stuff, here’s the better stuff, here’s the best stuff. As you typically move through that, the marketing and the feel changes, as well.
It’s like when I’m buying work shirts, before I made my own – which actually, I didn’t decorate this shirt, but I will one day.
Mark S: You mean you’re going to decorate it later today.
Marc V: Probably. That’s oftentimes how I work. I buy some, and then I put one on, and I’m like “I didn’t decorate this one,” and then I decorate it.
But yeah, go in there. What you’ll notice is the cheap shirts, they’re all on a rack, they’re jammed together. The price is the giant thing. Then, you go to the better shirts, and they’re a little bit nicer, and maybe they start talking about some features.
Then you go into the premium shirts, and they’re on nicer mannequins. They look really good.
Mark S: With tailoring.
Marc V: They put tags on there that you’ll see, like “wrinkle-free,” or “great for playing golf,” or whatever it might be. It could be anything.
You could do that with your strategy, as well. Look around and see “Okay, this is how I can strategize my best,” by using more descriptive words, and making it just sound, feel and be the best.
Mark S: I like that. Once again, I just want to remind everybody, apply that to your online presence, as well.
Marc V: Oh, yeah.
Mark S: You go to a product page, if you’re shopping for something like software or cars, or whatever it is. You’ll always see comparisons like that. Really, you have an opportunity if somebody comes to your website, to set their frame of mind right up front. “These are the things that you should be looking for.”
Maybe that’s even part of your strategy. You could even talk to people about “This is how I chose our good-better-best,” or our bronze, silver and gold standards, or three, four and five-star offerings, is I did this.
I surveyed our customers. Which ones do they prefer? I looked at the features that are most important to them. I called my apparel supplier, and asked them for levels of quality.
You could even make that pitch, so you’re even framing the good-better-best conversation, before they get to the price.
Marc V: What’s really cool about that is it made me think about asking customers questions, and when they’re online. There are so many cool things you can do nowadays. One thought that popped into my head was when you talked about the online presence, and I was thinking about asking customers questions.
You could even develop a little quiz, to help your customers find out what they want. Ask them the questions. How important is longevity? How important is price? How important is comfort? How important is it washing well?
You ask them all of these questions, and then you can use that as like a consultation. If you’re really sophisticated, and you have a great website, it could have a score that adds up, and it points them to “You should get the better.”
Mark S: I like that.
Marc V: But even if you’re not that sophisticated, just describe that online. Ask your customers to rate it themselves. Say “Go ahead and take this quiz yourself.” Ask five questions, and give them a score of one to five. Say “Do this. Add it up, and then here’s your scoring on the bottom.”
Mark S: If you scored a three, then you probably want the good shirt. If you scored a seven, you want the best shirt. People will re-take that quiz, until they qualify for the better shirt. They really will!
Marc V: And it’s a great conversation to have about it. But really, I think what I really like about this strategy is, for one, it 100% works. It’s been studied. This is the type of stuff that’s in business classes, and marketing and sales classes.
Mark S: It’s the kind of thing that the Harvard Business Review would write about.
Marc V: Yes! It really works, and studies prove it. Not only does it work for the business, by helping them generate more revenue, but it works for the customer, because the customers are generally more satisfied when they’re put into this scenario, because they’re empowered.
Mark S: To make a choice.
Marc V: Yes, like “I love for this type of thing, for custom apparel, I love it to be the best. I felt great about that decision.” Then, they’re going to come back. They’re going to write a great review about you.
And they’re probably going to even talk about how “It was great, because everywhere else I went, they just told me what to get. Then, I went to this shop, and they helped to guide me to choose what was best for me. It felt like I was getting custom tailored apparel.”
Mark S: I’d love to get that review.
Marc V: Yes!
Mark S: So, we’ve got a couple of different things that we talked about. We talked using the good-better-best strategy in an offensive way. Not an of-FEN-sive way, an OF-fensive way. Let’s say that that is more toward providing a better customer experience.
Marc V: Are pit stains offensive?
Mark S: Yes. They are, now. Providing a better customer experience, and you’ll increase your average sale, your average profit, your revenue.
Marc V: It’s about growth, making more money.
Mark S: Right. Then, the defensive posture is more you’re doing it because of conditions in the marketplace. You’re addressing a lower cost competitor, by offering more choice, and giving reasons for those choices, illustrating kind of some fences that keep people from buying a cheaper shirt, which is like the stain resistant, things like that.
Marc V: The wrinkle-free.
Mark S: Then, there’s the behavioral play, which is kind of the buy/don’t buy, the binary.
Marc V: It reduces the stress of them trying to pick if they’re going to do business with you.
Mark S: It’s a better customer experience.
Marc V: Yeah. They’ll feel a lot better, with that situation. It doesn’t mean you’re going to win all of the time. That’s not what any of these things are about.
I remember learning about this, when I was studying interpersonal communication in school, and discussing this, talking about good, better and best, and talking about choices. Part of the reason why good-better-best is a standard is because three is a very, very comfortable number to choose from.
Four is usually pretty good, too. Sometimes five is okay. It really depends on what you’re choosing from. But too many, and then people get uncomfortable.
Mark S: Too many choices.
Marc V: Too many choices, and then people don’t want to decide.
Mark S: Right.
Marc V: You’ll notice that particularly when you’re shopping for things, and you really have to think hard about this, and watch, but you’ll see when you’re in an area where they have like wine, in the grocery store. They’ll even have an aisle. I don’t even understand how that many brands can exist. There are so many!
But you’ll notice in the grocery stores or in the liquor stores, they know that that’s overwhelming. So, they literally will put up the signs and fences; “reds, sweet reds, cabernet.”
Now, you’re like “Okay, I only have to choose from five types of wine here.” Then, they shelve them specifically.
Mark S: By price.
Marc V: “I don’t want the cheap one. Alright, there we go. Now, I’ve got five wines to choose from,” and you can pick one. Remember, when you’re choosing the good-better-best, the reason why it’s great is because it is a limited number.
So, don’t go crazy with good/better, better/better, bestest best, even better. Don’t go too crazy with it, because then you’re going to make it worse for yourself.
Mark S: Can we establish like “ColDesi good,” that is the ultimate best? There’s good-better-best, and then there’s ColDesi!
Marc V: That’s only four choices, so that’s really good. That’s not bad.
Mark S: You could drop the other three, but that’s not what we’re doing.
Marc V: But yeah, it’s been around for a long time. It’s really proven to work, but it works over time. So you have to do it, and then you have to not give up on it. You tweak, you figure out what works. If nobody ever chooses the best, change what best means, what it is.
Maybe the brand of shirt was too expensive. It’s your market, too – who you’re selling to. If you go around and you sell to IT companies a lot, and tech businesses, if there’s a lot of tech in your area. So, you’re selling to software companies and hardware companies, companies that manufacture expensive goods, and they deal with a high-end client.
That best option is probably going to be really good for you. Your good might be somebody else’s better or best. At the same time, if you’re dealing with a lot of blue collar type of stuff -.
Mark S: If you’re in a rural area, and it’s not a big market.
Marc V: Yeah, or you’re dealing with a lot of landscaping companies and things like that, they have a different definition of it. They’re not going to spend $60 on a shirt, because they’re going to stain it.
But they also want something that they’re going to be able to wear for a little while, because they don’t want to have to buy shirts again.
They’ve done it. They’ve bought the really cheap shirt, before. They’ve ripped holes in it, and gotten it stained and shrunk. Now, they’re buying new shirts again, and they’re upset. So, you’re going to be able to find that, for your market.
What else? Anything else we have to cover? This was really a lot of good information.
Mark S: I like it. I think it’s something that everybody should employ, whether or not we’ve explained it well or not. I really do.
We’re going to link to the article. It’s a little long. I mean, it gets technical in places. But there are some great examples of information there.
I’d like you to read our show notes, because we’ll make sure to put links in there that will apply. Maybe we’ll even find a couple of good web pages that we can use as examples we’ll put in there.
Most of all, what I would really like you to do is look at the YouTube video, and put your comments and questions down below.
Marc V: That’s a great idea. That would be great.
Mark S: This is a particular topic I’d like to start a conversation about, because I’m looking for more ways that we can bring up the average price in the business. I think this is a good way to do it.
Marc V: And part of the goal of this podcast, and part of ColDesi and Colman and Company’s goals is that we’re giving our customers the products and the tools and the equipment, and everything like that, that you get to be the best in the industry.
If you’re listening to this and you’re still really new, and you’re not the best yet, it’s what we talked about before. It’s the fact that you’re studying this, and the fact that you’re thinking about it.
Now, you’re going to go out, and when you’re looking at flyers that come in the mail, and you’re looking at things in the stores, or you’re online shopping for something, you start to see “You know, this is a good-better-best situation.”
Mark S: Absolutely!
Marc V: Then, you’re going to get inspiration from others. Don’t try to think of everything by yourself. See something, and it will hit you. Like “That’s like my brand! That’s how I want to do it. I want to do something just like this.”
Mark S: I like that a lot.
Marc V: Great! So, the things that people should do right now; for one, you should start your basic good-better-best idea. What can you do, using the thoughts? Look at some old orders, think about things customers have asked, develop what it is.
If it’s multiple things, different brands -.
Mark S: Call your apparel rep.
Marc V: Yeah, call your apparel rep. Do something right away, just so the next time you have to quote somebody, you can try to insert that good-better-best in the quote.
Also, we talked about you shouldn’t verbally quote people things. You should put things in writing. Even if they do ask for something, you can always add a second quote or an additional piece of information that you add in there, in writing.
Mark S: Put it right in there.
Marc V: You get to say, even to regular customers “I know you love this stuff. I just want to let you know that I’ve put together a couple of more packages. I’m just telling everybody.”
Mark S: I like that.
Marc V: And you’ll make some more. That’s the one thing, is actually make one. The next is to go out in the world, and take time over the next handful of days. This weekend, when you’re shopping for something, or whatever it is, look for good-better-best stuff.
Mark S: Absolutely.
Marc V: And you’ll be a pro at it.
Mark S: You’ll see it everywhere, and you’ll be able to apply it.
Alright, that sounds great! Thank you for listening. Once again, if you are a regular podcast listener, please rate us, wherever you listen to podcasts. If you’re watching this on YouTube, definitely like us and share us, and put your comments below.
And buy more stuff from ColDesi! That’s my last commercial!
Marc V: But one of the best things you can do, definitely, is share, comment, like, all of that good stuff. If you are studying how to get better at social media yourself, you understand how important that is. That’s one of the great things you can do for us.
Thanks a lot for listening!
Mark S: Okay, guys. Thanks again! This has been Mark Stephenson from ColDesi.
Marc V: And Marc Vila from Colman and Company.
Mark S: You guys have a great business!