Finding the Right Price Point
In order to appeal to customers of all income levels, retailers should rely on a good, better, best strategy to provide quality products at a variety of price points.
Behind every domesticated animal is a person trying his or her best to give it the best life possible. No one wants to skimp on the proper care and nutrition their pet deserves, but some owners can’t afford the crème de la crème of pet products. Enter the “good, better, best” pricing model—a tried-and-true method that appeals to pet owners of all economic statuses.
“‘Good, better, best’ is a classic sales technique that is used by high-end retailers all over the world,” explains Alisha Navarro, president of 2 Hounds Design. “Walk into any jewelry store, talk for 5 minutes and then pay attention to what they show you—I promise there will be three price points to consider (if they are any good at their job).”
This pricing models alleviates the loss of sales from offering a universal option that may be fiscally out of reach for certain consumers, and gives customers the feeling of control over their purchasing decisions.
“The trick is to make sure good, better, best are all ‘good enough,’” says Navarro. “They are all good quality products that will serve your customer’s needs.”
Tailoring the Selection
Hot on the heels of this pricing strategy is the misconception that “good” offerings are not good at all, and instead feature harmful ingredients that are created with sloppy production processes. In other words, why should a retailer carry a product that’s not “the best?”
Eliminating that misunderstanding, “is a matter of choosing brands that are thoughtful in their design process such that costs are kept low without sacrificing too much on benefits, features and quality,” explains Sherry Samani, president of Sentiments, Inc. According to Samani, retailers have to carefully select companies and brands that offer high value at the “good” and “better” prices.
With this in mind, the first step that retailers have to take is to dismiss the idea that price and quality go hand-in-hand. Bryan Nieman, brand director of Fromm Family Foods, says that offering a range of price points increases the appeal to a variety of pet owners who are motivated by costs, explaining that pricing’s impacted by a number of factors, including ingredient availability, quantity and inclusion.
For example, instead of using honey found exclusively from a plant that grows deep in the Amazon and only flowers for two weeks every other summer, it’s utilizing honey that’s scraped off of a hive from an ethical beekeeper somewhere in Virginia.
That said, retailers have to be transparent about what delineates a product into each category, in terms of inclusion and benefits.
“If your ‘good’ option only half serves what they need, you need to specify that,” says Navarro. “Here is a ‘better’ option that meets all of your needs and here is a ‘best’ option that has everything that ‘better’ has, but [with] a few extra bells and whistles.”
This means that the selection of “good” and “better” options can be leveraged to bump shoppers into the next pricing range. Associates that are able to explain that even though the “good” pet food option is $30 less than the “best” option, it only includes 45 percent of a pet’s daily protein intake, meaning that some form of supplemental product will also be needed, which might bump the “good” option with add-ons up to just about the same price as the “better” or “best” options—and the latter requires no changes to the pet’s daily routine and keeps feeding time simple.
In terms of textiles and material goods, Sentiments categorizes its selection by creating product lines that customized to different price points.
“We separate our ‘good, better, best’ products by brand,” says Samani, whose globally-distributed, high-quality brands include Best Friends by Sheri, PAWSH and Disney. “While each bed offers a unique strength, we add features based on the brand. Our Best Friends by Sheri brand is our ‘better’ offering, and our PAWSH brand is our ‘best’ offering. When it comes to pet beds, what distinguishes the two is generally quality of materials and functionality. For example, PAWSH beds will use denser, higher weight fabrics and the beds will be 100 percent zippered.”
Other factors that are considered when creating textile products include fiber fill, stitches per inch and fabric colors and textures, continues Samani. From there, she explains that the company fine-tunes those features to improve quality, appearance and functionality without a significant cost increase.
That’s why, “it is better to merchandise them together; consumers can see and feel the difference and it works best for the retailer because of limited space,” says Samani. “This allows the sales teams to upsell.”
Read All About It
As it is with everything in the pet space, education is the key to successfully employing the “good, better, best” selling strategy. The first thing to realize is that categorizing the products in those boxes might give customers a warped perception of the quality of the products—this hearkens back to the idea that the “good” option is poorly created.
After all, “good, better, best” pricing, “is a very old school way of looking at things,” explains Pete Stirling, president of Skout’s Honor. “Price-point, traditional/legacy and emerging/innovative might be a better way of looking at things.”
No matter what buzz words are used to create an appealing section, having products merchandised on a shelf alone isn’t enough. Sales associates that engage consumers and have an open discussion about the benefits of each offering will prove instrumental in moving these products.
“The technique really works best when you are working one-on-one with the customer,” advises Navarro. “Just having three price points hanging on a rack isn’t going to help them decide and could potentially backfire if they can’t figure out which one meets their needs.”
Simply choosing a “good, better, best” option isn’t the end all, be all for pet parents, because while price point is a major factor, associate knowledge and first-hand experience will help sway those teetering on the edge of trading up take the plunge.
“Retailers who have a strong understanding of the brands they carry should be able to successfully focus on important points including distinguishing attributes of the brand being discussed, the quality of ingredients, quality of manufacturing process and that the food is nutritionally balanced and complete,” says Nieman.
Retailers should rely on their manufacturer partners for all the relevant information needed surrounding their products and develop creative ways to distill that knowledge to sales associates and the customers, as education is one of the biggest factors that pushes a consumer to skip over e-commerce options and frequent their favorite brick-and-mortar locale.
“Part of why a customer chooses an independent or neighborhood pet retailer is to have that intimate buying experience and better counsel from a pet professional,” continues Nieman. “Encouraging a customer to communicate what they need and then discussing options will allow for a more natural dialogue to find the best option that fits the customers’ needs.” PB