In 2007, Consumer Reports did a taste test with McDonald’s coffee and Starbucks. The Consumer Reports Coffee Taste Test showed that McDonald’s plain black coffee edged out Starbucks and other fast food chains and had the best tasting black coffee of them all.
Then in 2009, a more informal Starbuck’s taste test was held to look at some of the flavored coffees. This was a bit less scientific, but still a blind taste test. The result? McDonald’s wins again!
But here’s the point I thought was interesting: everyone still preferred the Starbucks environment, even though the McDonald’s coffee is better.
McDonald’s charges less for their comparably - and purportedly better - flavored coffees than the Seattle coffee giant, but people happily pay more because of the experience of shopping at Starbucks. This is a great illustration of how pricing is subjective and based, at least in part, on the story you’re trying to tell.
There are also a lot of “feels” that come up around pricing. Today, I want to tackle one of the most common concerns I hear from entrepreneurs with an existing book of business: How do I raise my rates so that I don’t lose my current clients or come off looking like I’m only in it for the money?
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Theme music: “Welcome to the Show” by Kevin MacLeod, incompetech.com. Music licensed under creativecommons.org/licenses/by/3.0/