Decision paradox: Are we screwed if everything costs the same!?!?!

This is a massive thought experiment and I want you to really think about it. So far when testing it in conversation the initial response was a belittling smile by a realization that the answer screws with your mind.....because maybe we forgot what we like

welcome to the 45-dirham menu

I was recently at ATM and noticed something slightly bizarre when looking at the food menu. There were three different wraps. All 45 dirhams. Three different salads. All 45. Three different pastas. 45. Three different sandwiches. You guessed it: 45.

Basically, whatever mood you were in, the answer was 45 dirhams. And standing there looking at it, I started wondering: How am I actually supposed to decide?

Normally, price is one of the signals we use to make a decision. Perhaps I want something cheap and quick. Perhaps I'm willing to spend a little more because something looks better. Perhaps I see a premium option and think, F* it, that sounds good.

Here, that entire decision dimension had disappeared. A salad? 45. Pasta? 45. Wrap? 45. Sandwich? 45. Price had become irrelevant. And there i am standing wondering: what do I fancy?

price isn't only how much you charge

We spend a lot of time in revenue management thinking about price as the outcome of a calculation. What can we charge? What's demand doing? What's the competition charging? What's the customer's willingness to pay?

Golden rule: price also communicates.

A 30-dirham sandwich next to a 45-dirham wrap and a 60-dirham pasta tells me something before I've even read the descriptions. It creates a hierarchy. It gives me reference points. It allows me to trade up or down depending on what I value at that moment.

Make everything 45 and you've removed that signal. Now my decision has to come entirely from somewhere else:

the description, the ingredients, the picture, familiarity, dietary preference or simply whatever catches my eye first. That isn't necessarily bad. But commercially, you've given up one of your most powerful tools for influencing my choice.

you've also removed the opportunity to trade me up

This is where my revenue-management brain starts twitching.

Let's say I'm perfectly happy paying 45 for a sandwich. Fine. But perhaps one pasta sounds significantly more premium. Better ingredients, more perceived value, something I'd happily pay 55 or 60 for.

You've just charged me 45. Thank you very much. Or perhaps there's a simple wrap that I would have happily bought for 35. At 45 I might decide it's poor value and buy nothing.

Same pricing structure. Two different missed opportunities. One customer had a willingness to pay above your price. Another had willingness to pay below it. By making everything the same price, you've essentially decided that everyone has the same willingness to pay for everything.

choice architecture matters

Supermarkets understand this beautifully. They don't generally give you one bottle of wine at 45 and another at 45 and another at 45 and another at 45. They give you something at 25, something at 45 and something at 80.

Now you have a decision. Cheap. Sensible. Treat myself. And here's the fun part: suddenly 45 has meaning. Without the 25 and 80, it's simply a number. With them, it becomes the comfortable middle. You've created an anchor above it and an alternative below it.

The customer still chooses. You've simply designed the environment in which that choice happens.

revenue management shouldn't make everything average

Hotels do versions of this all the time. We create room categories with tiny price differences. We price upgrades without considering the perceived jump in value. We sell ancillary products based on cost-plus logic rather than willingness to pay. Or we become so obsessed with keeping things simple that we flatten the very differences that could help customers self-segment.

Good pricing should allow customers to reveal themselves: Give me a cheaper option and I can tell you I'm price-sensitive. Give me a premium option and I can tell you I value the experience more than the money. Put something attractive in the middle and you give me a comfortable compromise.

But give me twelve things for 45? Now you're asking the chicken wrap and the truffle pasta to fight it out on personality alone.

sometimes different prices make choosing easier

There is an obsession with reducing friction in the customer journey, and rightly so. But simplicity doesn't necessarily mean sameness. A well-designed pricing ladder can actually make a decision easier because it helps me understand the choices.

Good. Better. Best.

Not because every customer should automatically be pushed towards the most expensive option, but because different prices help different customers find themselves. That's fundamentally what revenue management is supposed to do.

The ATM menu removed price from the decision completely. Maybe operationally that's wonderfully simple. Maybe commercially it even works. But it left me with a fascinating question. If everything costs exactly the same, what are you using to influence what I buy?

Because if the answer is nothing, you're not really managing willingness to pay.

You're just charging 45 - lazy a** .....

Love, Fabi