It doesn’t matter how great your product is or how wonderful your lead nurturing methods are. If the price isn’t right, no one’s going to buy from you. We don’t really talk about pricing schemes all too often, but the fact of the matter is that if you aren’t pricing your products or services properly, you’ll either be selling yourself short or lose customers because the price of the product is too high for its perceived value.
You may think that everyone’s looking for a bargain, but this couldn’t be further from the truth. As a matter of fact, most spenders are really looking for mid-quality, mid-priced stuff – which is why you need to be taking advantage of offering multiple price points, whenever possible.
Studies have regularly found that if you offer a middle ground price for the same product, most buyers will splurge a bit to buy the mid-priced option and avoid buying the lower-end option, but will be less likely to buy the higher priced option.
Companies can make a real impact on their top- and bottom-lines with effective pricing. A good pricing is both an art and a science which means that different personalities approach the topic entirely differently.
So to win using pricing strategy, you need to do the following:
1. Raise your prices to increase revenue
You can raise sales volume by raising your price. The key is that the buyer has no subjective way to judge pricing and may be more willing to buy at the higher price point.
2. Limit the number of options
If you give the prospect too many options (choice “overload”) sales will go down.
3. Offer tiered pricing
While choice overload is deadly, prospects respond well to tiered options. Always highlight the value of lower-priced tiers via “anchoring” – list a significantly higher priced upper-tier option. Interestingly, if you offer low-, mid- and upper-tier options, don’t be surprised if 50-60 percent of your sales come from the middle tier. That means when you offer low price, explain to them why it is low and still of high quality.
4. Consider “all you can eat” pricing
Unlike transactional pricing (by unit, volume, time, etc.) the all you can eat model provides an unlimited amount of something over a certain time period. The name comes from the restaurant industry where patrons can eat as much as they want (buffet style).
5. Set the price as “free”
If it is a product, sometimes you can offer some for free. The free-trial offer is one where the user has access at no charge during a certain time period. . After that time, the user loses access or starts paying. The secret to this model is having a great conversion process to convince the individual to use and then pay for the product. The idea is to get them using the product, then convert to the paid upgrade because they need more functionality, data, or whatever.