Does Size Really Matter In Your Business?
I know that your mind could go in a million different directions with that question, so let me quickly clarify (smile)…
The quick answer is ‘yes’ but it may not be for the reasons you think. If you
understand the “Size Principle”, you can quickly add a lot of additional money to your bottom line. Here’s what I mean…
The Size Principle
I know what you’re thinking.
Why would people pay more for less? Here’s a “real world” example… Think back to the last time you went camping. Do you remember walking through the grocery store to get all the food ready for the trip? Now think about what you specifically packed for breakfast.
If you’re like me, the first thing that comes to mind are those “mini cereal boxes”. You remember those right? They’re those tiny boxes of cereal bundled together in groups of 8.
Each day while camping we’d wake up, crack open one of those boxes and eat the cereal right out of the box. It was an absolute blast and the “experience” was completely different than from eating “normal” cereal on any other regular day. But here’s the interesting part…
Those “mini cereal boxes” actually cost more and gave less cereal and yet the experience was much more memorable – which is partly why we paid more for it (that and, of course, the convenience).
There are all kinds of similar examples – especially in your grocery store. There are big bottles of pop, normal cans of pop and now guess what…mini cans of pop. Same product, different size pacakges.
In fact, I just saw that one beer company is now offering a different size case of beer. Yes you can get the regular case of 12 or 24 bottles but they are also offering a case of 20.
In this scenario, the case of 20 was obviously more expensive than the case of 12 but it was only just slightly less than the case of 24. But that subtle price difference was enough to persuade many customers to pick it up instead of the full case of 24.
And you know that the beer company made more of a profit margin on the case of 20 than they did on the case of 24.
So with all this in mind, what is the lesson here for you and I?
The Big Lesson
People are willing to pay more for the same product if they can get the quantity that’s “just right” for them.
Knowing that, if you take a look at your current products, ask yourself, can I create a “slimmed down” version of the same product?
Perhaps it doesn’t have all the bells and whistles of your normal product but because of that, you can offer it slightly cheaper. That would make a great downsell for anyone who doesn’t purchase the regular product.
With that in mind, an excellent example of a “slimmed down” version of a product that people actually pay more for are the Book Summaries. Instead of having to read an entire book, someone is willing to pay to have someone offer a 12-15 page summary (and often times they are paying more for the summary than the actual book!)
Another thing you could do is “biggie size” your existing product. What could you add to make a deluxe version? Perhaps you could include access to a membership site where the content is broken down even further. Plus you could include interactive elements with you, other customers or topic experts.
The options are endless but the key to remember is the product itself is not really changing at all … just the packaging is changing.
So the next time you are looking to create more from what you already have, look at your existing products and ask yourself “Can I package these differently to appeal to more people”?
If the answer is yes, then you likely have an easy opportunity to grow your bottom line with very little additional effort.