Higher Prices Signal Quality

Shaan Puri shares how raising prices and using descriptive language dramatically improved his online sushi restaurant's performance, based on advice from behavioral economist Dan Ariely.

• Counterintuitive Pricing Strategy:

  • Raising prices actually increased both revenue and conversion rates
  • "When somebody looks at this they just see cheap sushi so guess what people don't want which is the worst sushi"
  • The perception of "cheap sushi" was hurting their business despite their goal to make sushi "more accessible more affordable"

• The Power of Descriptive Language:

  • Created three models of language for their menu items
  • Simple descriptions were replaced with more detailed language (e.g., "fresh never frozen atlantic hand caught salmon" instead of just "salmon")
  • Same product, more words = higher conversion rate

• Testing Methodology:

  • Implemented simple A/B testing by alternating menus by day
  • "We would do day one we would show menu a day two we would show menu b then we would look at the number at the end of the day"
  • This approach allowed them to measure real impact without sophisticated tools

• Magnitude of Impact:

  • Not just incremental improvements but transformative results
  • "It's not like just a 10% improvement it was like a two x three x type of improvements you could get by stacking these on top of each other"

• The "Tortilla Principle":

  • Businesses often fail to highlight their unique quality differentiators
  • Example: A restaurant paying $2 per tortilla (vs 20¢) for fresh tortillas trucked in from Mexico daily but not telling customers
  • "Where are we trucking in tortillas fresh from mexico and are we doing a good job of telling that story and almost always the answer is no"

• Key Marketing Insight:

  • Quality differentiators that seem like "table stakes" to business owners are often invisible to customers unless explicitly highlighted
  • "The things you do in your business that are like the blood sweat and tears to do something great you take for granted"