Guac is extra. So why are we happy to pay?
Guac is Extra, So Why are We Happy to Pay? A Psychological and Business Dive into Chipotle’s Pricing Strategy
Chipotle’s “guac is extra” spiel has become a pop culture phenomenon. In a world of hidden fees and surprise charges, their upfront transparency about the add-on cost of guacamole feels almost refreshing. But why? Why don’t customers balk at the idea of paying extra for such a seemingly basic ingredient? I recently wrote about why transparency in design is important- but, from a psychological and business standpoint, let’s unpack the genius behind this pricing strategy.
- Scarcity and Desire: Framing guacamole as an “extra” creates a sense of scarcity. It’s not just another topping, it’s a special upgrade, a luxury add-on. This triggers the psychological principle of reactance, where people become more motivated to have something when they feel its availability is limited. The “guac is extra” spiel subtly plants the seed of desire, making customers think, “Oh, it must be good if I have to pay extra for it.”
2. Control and Choice: The transparency empowers customers. They’re not blindsided by hidden fees; they’re given the choice to indulge in a premium topping or stick to the basics. This sense of control over their purchase decision taps into the psychological need for autonomy, fostering a positive sentiment towards the brand.
3. Framing and Value Perception: By separating guac from the base price, Chipotle subtly elevates its perceived value. Customers don’t think of it as an overpriced topping, but rather as a separate, gourmet item worth its price tag. This framing plays on the anchoring effect, where the initial price of the burrito sets the reference point, making the additional cost of guac seem comparatively smaller.
4. Nudging and Justification: The friendly “guac is extra” reminder acts as a gentle nudge, prompting customers to consciously consider their choice. This subtle prompt can trigger self-justification, where customers rationalize their spending by convincing themselves they deserve the “treat” of guacamole.
5. Building Trust and Brand Image: This pricing strategy aligns with Chipotle’s overall brand image of transparency and quality. By being upfront about costs, they cultivate trust with customers, reinforcing their perception of Chipotle as a brand that values honesty and ethical practices.
So, while the extra cost of guac might initially sting, the psychological and business benefits for both Chipotle and its customers are undeniable.
Customers feel empowered, in control, and even a little bit special for indulging in the creamy goodness. And Chipotle? Well, they get to boost their profit margins while maintaining their positive brand image. It’s a win-win, fueled by a clever understanding of human psychology and a dash of marketing magic.
Chipotle’s “guac is extra” spiel is more than just a quirky meme. It’s a masterclass in understanding and influencing consumer behavior. By embracing transparency, scarcity, and choice, Chipotle has created a pricing strategy that not only generates revenue but also strengthens customer loyalty and brand trust. So the next time you hear that familiar phrase, remember — it’s not just about the guac, it’s about the psychology behind it.
