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How To Introduce Premium Pricing
Psst. Wanna know a secret?
Of course, you do, you curious creative so-and-so!
You’re probably leaving money on the table.
(accounting department screams)
There are plenty of reasons this could be the case, from anxieties around pricing conversations to sales objections to a lack of confidence. We totally get it.
While we encourage you to dismantle all that gar-bahj and be the star that you are, we also know that’s easier said than done. Luckily, there’s one money-makin’ approach that we know you can tackle right here, right now.
INTRODUCING:
Premium pricing!
(and the crowd goes wild!)
What “Premium Pricing” Means
There are a few different interpretations of the term “premium pricing,” and we’re gonna give you a taste of the zestiest flavor of this delicious device.
To us, “premium pricing” means offering multiple tiers for your goods/services.
The action itself is that freakin’ simple, but the way it works and the results it produces are damn near magical.
What “Premium Pricing” Looks Like
You’ve seen this before– you’re about to sign up for a new service or subscription, and you’re faced with three options, all at different price points.
They don’t differ in quality, but they do each have different levels of involvement.
This isn’t some crazy-complicated system. It’s the same thing we always encourage – price anchoring. This is just a more visual, more overt anchor.
Benefits Of Introducing Premium Pricing
Choice architecture
Sounds pretty cool, yeah? Probably because IT IS!
Choice architecture is the intentional design and display of options to influence decision-making.
It’s the reason that the cheapest liquor at the store is never in your direct line of sight, and it’s the reason that you’ll provide different options, understanding which one will be picked most often.
That’s pretty powerful psych stuff right there.
But wait, there’s more!
Confidence, reference, and defense
When you introduce premium pricing, you’re building a system in which you price with confidence, easily demonstrate the value of your work, and ditch the idea that you might overprice and lose the client.
Even if your top-tier feels ludicrously expensive to you, those who don’t want to pay for it… won’t. You won’t shut them down by offering that extra ritzy option; they’ll look at your other choices.
At the same time, you get to shoot your shot every time someone is considering your services. You won’t always get that top-tier sale, but you’ll get it a heck of a lot more than if you never asked.
A system like this also means you can chill out about defending your prices to cynical clients.
When they whine, “Why is this so expensive?” you have these answers on tap:
- It doesn’t have to be; look at these other options.
- Of course, it is; look at that long list of features!
You don’t actually have to say that because your premium pricing model says it for you. Booyah!
Choosing The Price Points And The Spread
Once you’ve got the basics of your pricing practices down, introducing premium pricing is all architecture and articulation. (And apparently alliteration!)
Ah, look at those beautifully articulated options, built with thoughtful architecture!
We can’t tell you what to charge or what to offer, but we will give you a couple of hints for making your own version of the above.
Make that low number highly profitable for you
We all want the client to pick the highest tier, we expect them to pick the middle tier, but we don’t ever offer a tier we’re hoping they won’t pick. This should be a genuine option, not a decoy.
Make the jump between tiers significant
Avoid decision fatigue by making the decision easy on your client. You can do that by making the differences between the tiers stark.
Ever found yourself wavering on a decision and wondering, “why is this option so much more expensive”? Great, you already know what to avoid!
For an example of what works, check out the price points of a subscription or service you currently pay for and ask yourself whether it was an easy decision to make and why.
Keep it simple
The last thing you want to do is throw too many options at the client and give them choice paralysis.
So how many options should you provide?
There’s no hard rule, but there are preferences. If you haven’t noticed by now, we’re big fans of the “rule of three.” We use it in our pricing, in our writing, and in this very sentence.
Whoa. Meta.
What To Do If You Already Set Your Prices
If you’re into this idea but you’re worried about changing up your prices, we’ve got somethin’ to say to you:
You should be regularly raising your prices anyway.
That whole ~ish~ is its own topic with its own challenges. We recommend brushing up on that before you roll out your new pricing model.
All refreshed and ready to dive deeper? Great! We hope to see you in our next Business Bootcamp! And check out this dope quiz to see if you’re ready right now.
How To Introduce Premium Pricing
You’re probably leaving money on the table. Luckily, there’s one money-makin’ approach that we know you can tackle right here, right now. Let's do this!
You’re probably leaving money on the table. Luckily, there’s one money-makin’ approach that we know you can tackle right here, right now. Let's do this!
Psst. Wanna know a secret?
Of course, you do, you curious creative so-and-so!
You’re probably leaving money on the table.
(accounting department screams)
There are plenty of reasons this could be the case, from anxieties around pricing conversations to sales objections to a lack of confidence. We totally get it.
While we encourage you to dismantle all that gar-bahj and be the star that you are, we also know that’s easier said than done. Luckily, there’s one money-makin’ approach that we know you can tackle right here, right now.
INTRODUCING:
Premium pricing!
(and the crowd goes wild!)
What “Premium Pricing” Means
There are a few different interpretations of the term “premium pricing,” and we’re gonna give you a taste of the zestiest flavor of this delicious device.
To us, “premium pricing” means offering multiple tiers for your goods/services.
The action itself is that freakin’ simple, but the way it works and the results it produces are damn near magical.
What “Premium Pricing” Looks Like
You’ve seen this before– you’re about to sign up for a new service or subscription, and you’re faced with three options, all at different price points.
They don’t differ in quality, but they do each have different levels of involvement.
This isn’t some crazy-complicated system. It’s the same thing we always encourage – price anchoring. This is just a more visual, more overt anchor.
Benefits Of Introducing Premium Pricing
Choice architecture
Sounds pretty cool, yeah? Probably because IT IS!
Choice architecture is the intentional design and display of options to influence decision-making.
It’s the reason that the cheapest liquor at the store is never in your direct line of sight, and it’s the reason that you’ll provide different options, understanding which one will be picked most often.
That’s pretty powerful psych stuff right there.
But wait, there’s more!
Confidence, reference, and defense
When you introduce premium pricing, you’re building a system in which you price with confidence, easily demonstrate the value of your work, and ditch the idea that you might overprice and lose the client.
Even if your top-tier feels ludicrously expensive to you, those who don’t want to pay for it… won’t. You won’t shut them down by offering that extra ritzy option; they’ll look at your other choices.
At the same time, you get to shoot your shot every time someone is considering your services. You won’t always get that top-tier sale, but you’ll get it a heck of a lot more than if you never asked.
A system like this also means you can chill out about defending your prices to cynical clients.
When they whine, “Why is this so expensive?” you have these answers on tap:
- It doesn’t have to be; look at these other options.
- Of course, it is; look at that long list of features!
You don’t actually have to say that because your premium pricing model says it for you. Booyah!
Choosing The Price Points And The Spread
Once you’ve got the basics of your pricing practices down, introducing premium pricing is all architecture and articulation. (And apparently alliteration!)
Ah, look at those beautifully articulated options, built with thoughtful architecture!
We can’t tell you what to charge or what to offer, but we will give you a couple of hints for making your own version of the above.
Make that low number highly profitable for you
We all want the client to pick the highest tier, we expect them to pick the middle tier, but we don’t ever offer a tier we’re hoping they won’t pick. This should be a genuine option, not a decoy.
Make the jump between tiers significant
Avoid decision fatigue by making the decision easy on your client. You can do that by making the differences between the tiers stark.
Ever found yourself wavering on a decision and wondering, “why is this option so much more expensive”? Great, you already know what to avoid!
For an example of what works, check out the price points of a subscription or service you currently pay for and ask yourself whether it was an easy decision to make and why.
Keep it simple
The last thing you want to do is throw too many options at the client and give them choice paralysis.
So how many options should you provide?
There’s no hard rule, but there are preferences. If you haven’t noticed by now, we’re big fans of the “rule of three.” We use it in our pricing, in our writing, and in this very sentence.
Whoa. Meta.
What To Do If You Already Set Your Prices
If you’re into this idea but you’re worried about changing up your prices, we’ve got somethin’ to say to you:
You should be regularly raising your prices anyway.
That whole ~ish~ is its own topic with its own challenges. We recommend brushing up on that before you roll out your new pricing model.
All refreshed and ready to dive deeper? Great! We hope to see you in our next Business Bootcamp! And check out this dope quiz to see if you’re ready right now.
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