Recently I posted an idea about a simple change to the Starbucks app that could help baristas earn extra money through more generous tips. A friend asked if I could expand on the thought process behind the suggestion and that’s the reason for this article. I’m sure there are many things Starbucks could do to help workers so this is my contribution to the idea pool.
If you’re a Starbucks fan who uses their app, after making your purchase you get a message that allows you to select the tip that you’d like to leave. You can see in the screenshot below; the first selection is “No tip” followed by a few other options with the max tip being $5. My simple suggestion is that Starbucks flip the script and add a few more options.
Before sharing the details on exactly what Starbucks should do, let me set up my suggestion with a real-world study.
A company in Southern California sold spas and hot tubs with prices ranging from $6,000 to $15,000. Their salespeople typically started the buying process by showing customers the $6000 spa. From there they’d progress to the better models in an attempt to upsell them. The problem with that approach is this; when you start with the $6,000 product, the $15,000 spa seems extremely expensive by comparison.
During a consultation with Robert Cialdini, it was mentioned that people who bought the $15,000 spa loved it. Many said they got more use out of it than some rooms in their homes. Upon learning that honest feedback, Cialdini asked how much would it cost to add an additional room to a home in Southern California? Answered ranged anywhere from $60,000 – $80,000. Bingo! A potential new comparison point!
Cialdini advised the client to have salespeople start the buying process with the $15,000 spa while weaving the room addition question into the conversation. It might go something like this:
Salesperson – “Customers who bought the XP5000 spa love it! In fact, many say they use it as much or more than any room in their house. If you were to add a room to your home how much would that cost?”
Customer – “I don’t know, maybe $60,000 or $70,000.”
Salesperson – “Well here’s some good news. You don’t need to spend $60,000 or $70,000 to get that kind of enjoyment because the XP5000 is only $15,000.”
Suddenly $15,000 seems like a bargain compared to $60,000. And how well did this approach work? In the three months before the consultation, using their old sales approach, the company only sold five high-end spas. But, in the three months following the change in their sales process, 26 high-end spas were sold. That’s an increase of 520%!
And think about this – those who didn’t buy the $15,000 spa were more likely to buy a $12,000 or $10,000 model because those suddenly seem like a deal compared to the most expensive option. In other words, the average spa sale was probably significantly higher versus the old way of selling.
Back to the Tip
If the first thing you see is no tip, you may not choose that because you might feel like a cheapskate. Leaving only $0.50 might still make you feel a bit cheap. Now $1.00 looks like a good tip compared to those options.
Imagine the first tip you saw was $5, followed by $4, $3, $2, and $1 options, finally ending with “No tip.” Seeing $5 you might think, “No way. That’s too much for the purchase I just made.” However, by comparison the other options start looking more reasonable. The simple act of starting with $5 at the top, is very likely to increase the average tip just like the average sale of the spa went up.
Something else to consider; the way the app is set up now, $1 is the middle option. People defer to the middle more than the high or low ends. By removing the $.50 option but adding a few more choices, $3 and $2 are now the middle of the road tipping options. This should also be a factor in helping baristas earn better tips.
How About You?
What I’ve just shared goes beyond tips at Starbucks. Imagine you’re a restaurant owner with a wine list. Starting with the most expensive wines at the top and putting the least expensive at the bottom is very likely to help overall wine sales.
Perhaps you work for an organization that looks for donations. I’ve seen too many times where the smallest amount is the first thing you see and the largest donation amount is the final choice. Again, flipping the script and starting with the higher donation amount then ending with the lowest is likely to bump up average donations.
I hope you can begin to see there are lots of opportunities to incorporate this little bit of psychology to help your sales, good cause, or whatever else you may be involved with.
Brian Ahearn is the Chief Influence Officer at Influence PEOPLE. An author, TEDx speaker, international trainer, coach, and consultant, Brian helps clients apply influence in everyday situations to boost results.
As one of only a dozen Cialdini Method Certified Trainers (CMCT) in the world, Brian was personally trained by Robert Cialdini, Ph.D., the most cited living social psychologist on the science of ethical influence.
Brian’s first book, Influence PEOPLE, was named one of the 100 Best Influence Books of All Time by Book Authority. His follow-up, Persuasive Selling for Relationship Driven Insurance Agents, was an Amazon new release bestseller. His latest book, The Influencer: Secrets to Success and Happiness, is a business parable designed to teach you how to apply influence concepts at home and the office.
Brian’s LinkedIn courses on persuasive selling and coaching have been viewed by more than 500,000 people around the world!