The Williams-Sonoma bread maker story – as told on Podia.com

Podia.com have a great on-boarding article for new members trying to figure out how to set up their membership tiers.

They use this story to clarify the idea of relative pricing. Beautiful.

A quick and fascinating story about bread makers

What does your membership have in common with bread making machines?

A lot, actually.

In the 1990’s, William-Sonoma introduced a bread maker in their stores, priced at $275.

It was one of the first bread makers in the market, and when it launched…sales were disappointing, to say the least.

Concerned, the retailer hired a research firm to help them figure out why the bread maker wasn’t selling.

The consultants came back with an interesting recommendation:

“Make a bread maker that’s slightly better, but price it twice as high.”

Williams-Sonoma did what the researchers suggested, and guess what?

Sales skyrocketed!

But it wasn’t the newer, pricier bread maker that was selling…

…it was the cheaper, original one.

What happened here?

The answer is one that pricing experts have known for a long time: relative pricing.

Initially, customers had no idea if the $275 bread maker was a good deal or not; they had never seen a bread maker before, and didn’t know how much it “should” cost.

But by introducing a much more expensive model that was only a little bit better…Williams-Sonoma made the original model look like a fantastic deal!

Currently trying to decide between Podia and Kajabi. The things that these platforms can do these days! Soon they will be able to tie your shoelaces for you.