I help entrepreneurs leapfrog over the typical potholes that derail most small businesses with inspiration, motivation, education, and support across a wide range of business topics drawn from over a decade of running my own business, teaching entrepreneurship for the City of New York, and coaching and consulting privately with dozens of women and minority small business owners. Honestly, why go it alone when help is an email away?
Power Throuple
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Three has an almost mystical symbolism and power whether you're pondering math, music, or spirituality. Our brains just love patterns, and three is the smallest number needed to create one. It's satisfying, complete, and somehow feels "just right" to our minds. That's why it's so powerful when considering pricing strategies, as well. Here are three ways to leverage the power of 3 for your pricing: Sandwich PricingWhen businesses offer three price points, something fascinating happens. The middle option often becomes the most popular choice. Why? Because it feels like the "Goldilocks" option - not too expensive, not too cheap...just right. By sandwiching your target offer between a budget option and a premium one, you create a comfortable middle ground that many customers will gravitate toward. But, you also want to nudge them in the right direction by highlighting the middle option in some way. Some businesses note their middle option is the "most popular" or "best value," while others make it visually pop and standout. (See Is the Price Right? for more about this and other pricing models) The Decoy EffectSometimes adding a third option that nobody wants or considers a good value boosts sales of the option you're driving your prospects to purchase. Let's say you have two coffee sizes: small ($2) and large ($3.50). People might split evenly between them. Add a medium size at $3.25, and suddenly the large seems like a much better deal. More people choose the large, even though nothing about it has changed! What has changed is that your medium-priced option has shifted your customers' perceived value of your more expensive option. (See The Decoy Ploy for more about this pricing strategy). Good-Better-BestThis approach focuses on creating distinct value tiers that drive specific customer behaviors by offering three clearly defined options that appeal to different customer segments:
Each tier is designed to be genuinely attractive to a specific customer segment, which is what distinguishes it from sandwich pricing. Need some help with your pricing strategy? Let's talk. Until next time, Your success is our strategy! No longer want to receive my newsletter but don't want to miss my special offers and announcements? Click here. |
Easily Said & Done
I help entrepreneurs leapfrog over the typical potholes that derail most small businesses with inspiration, motivation, education, and support across a wide range of business topics drawn from over a decade of running my own business, teaching entrepreneurship for the City of New York, and coaching and consulting privately with dozens of women and minority small business owners. Honestly, why go it alone when help is an email away?
It's a tough time to run a small business—with many economists predicting a recession and all the uncertainty caused by the US government. We've certainly yet to see the impact of the massive federal layoffs and cuts to government programs in addition to other economic issues at play. As a result, many consumers and businesses are already tightening their purse strings and preparing to go without. In response, many of my students and clients have been floating the idea of offering discounts...
For quite some time now, I've been teaching entrepreneurs about the benefits of value pricing. (Check out Does Size Really Matter to learn why this strategy makes so much sense for small businesses.) But, I was today years old when I learned about Dutch economist Peter van Westendorp's Price Sensitivity model, which he developed in the 1970s. To determine psychologically acceptable price ranges for products or services, he created 4 research questions to ask target audiences. If you've ever...
Ugh, I'm knee-deep in prepping for two new business growth classes to kick off on Monday and I am S-T-R-E-S-S-E-D! I'm reliant on others to set up key aspects of the course, including several guest expert sessions. On the one hand, that's really helpful. But, on the other, it means I'm not in control of my schedule and don't know what speaker slots are available for the experts I'm reaching out to. So, it's kind of like being an airplane pilot forced to circle above the tarmac until a gate...