How to make buyers go with the pricing option you want

Hollywood is in chaos.

Right when it seemed Netflix had locked up the Warner Bros deal, Paramount dropped a hostile $108B bid.

Whoever wins will have more leverage to push customers to higher-priced plans.

Luckily for us B2B sellers, we don’t need to spend billions to steer buyers to the package we want.

So this week we’re covering a simple hack that does exactly that.

Let’s go!

If you offer three price points, the middle tier dictates which option feels like the right choice.

Let’s look at every sales orgs’ favorite daytime beverage – iced coffee.

When the medium is priced close to the large, customers buy more larges.

Why?

Because the large is only ~10% more and you get a LOT more coffee.

It looks like a steal.

So if the shop wants to sell more larges, they’d move the medium closer to the large.

Conversely, if they want to sell more mediums, they’d widen that gap, making the medium feel like the more reasonable choice (relative to the "premium" option).

Now let’s look at a B2B example…

In this proposal, Ultra offers substantially more than Pro.

If the prospect is a fit for Ultra, this pricing makes the upsell a no-brainer. Why wouldn’t they pay 10% more to get all that value?

But what if Ultra isn’t the right fit and you want them choosing Pro over Basic?

Then you’d narrow the gap between Basic and Pro by giving a deeper discount on Pro – or ideally, reducing the discount on Basic.

This makes Pro look like the more reasonably priced option…

Now obviously B2B proposals have a lot of moving parts.

SLAs. Commits. Terms. Start dates.

There are a lot of other levers reps can pull (which we’ll cover in the upcoming issues).

But the fundamentals of the pricing effect still apply.

So next time you present a proposal…

Don't just tell buyers which tier to choose.

Make them want to choose it.

*Reply with your number. I’ll share the poll results in the next issue.

*Looks like we’ve got a heavy outbound crowd here. Love to see it.