Photo by Thomas Hawk
One of my very first jobs was working behind a concession counter for a big multiplex cinema. It isn’t the sort of place where one would expect to learn a life skill, but early on I learned an important lesson in business — the art of the up-sell.
You see, movie theaters make very little from the box office receipts, so the concessions counter is the lifeblood of the industry. The setup is pretty much the same at every theater, but most people don’t tend to think about it. Because the actual cost of the popcorn and soda is so low, the theaters reap big profits from selling captive customers overpriced snacks and beverages.
To help “encourage” movie goers to pay the max, theaters will price their small popcorns at ridiculously expensive levels and then have a minor jump in price from small to medium and medium to large. If you were to price the popcorn by ounce, a small would cost four times as much as a large, but because of the high cost at the small level, it makes it easier to convince consumers to pay a little bit extra for a lot more food. My sales pitch would typically go, “Did you know you can get a large for only 50 cents extra?” That was all it took and at least 75% of the customers would go big.