That was the sign in the American Terminal at LAX a few weeks ago. So I did. It cost me $7.00 and I'm pretty sure that's at or near the top that I've ever paid for a shine. I looked up from the paper I was reading while he was slapping on the polish at one point and asked, why he didn't post a price for the shine? "Well first of all," he began, "the free offer attracts attention, don't you think?" It certainly had gotten mine, I had to admit. "Second, most folks do what you just did, and ask why I say the shine is for free. And I tell 'em what I'll tell you now. If you think I've done a good job when I finish, pay me what it's worth to you."
I then asked this artiste (it was starting to look like this was going to be a killer shine) if he'd ever been stiffed? "Nah, not yet." When he finished he looked up and smiled as I went to the wallet and pulled out all the bills I had smaller than a twenty. That happened to come to $7.00. If I'd had another two singles I probably would have forked that over, as well. How great a businessman/seller is this guy? First he's a magical marketer. He's decided that his USP is free shoe shines. Hmmm. Talk about separating yourself from the competition. He's also figured out that "advertising that USP" would would "stop traffic," literally.
And how about his pricing strategy? The man's a genius! If he tried to lure customers in with under market pricing (a different USP), let's say $3.00, he'd get good traffic, and likely as not, a fair measure of $2.00 tips. Total $5.oo per shine. If he put a $5.00 price out there, it'd be about market for a major city air terminal so he would be undistinguished from his competition. No big deal unless he gets pretty busy in which case arriving passengers might continue walking toward "baggage" while looking for a less crowded shine parlor. Moreover, with a $5.00 cellar price he's probably psychologically capped his "tip" opportunity at $2.00, and more often than not, I suspect, the tip would be a buck.
His zero based pricing leaves the decision entirely in the hands of the customer. And I suspect the decisions made on payment include elements not even in the game in a normal shine transaction. For example, "This guy took a risk but worked hard to give me a great shine, and he did. He should be rewarded for that and even if I pay more than I normally would. What the heck, it's not going to change my retirement date." Or how about the "fun" or the "that was interesting" factors. That's worth a buck or two extra right there. "
So let's take a look at his selling business plan.
1. I will develop a unique selling proposition for my service: free shines
2. I will advertise my services
3. I will give great service and
4. Trust that I will be appropriately rewarded for my customer focus.
Where would you bet he ranked in gross income of his peers at LAX? Me too.
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