Posted by Some years back I did a test run on a new software I was selling. I wanted to price it at $49, but it didn’t sell well at all during the test.
I knew the software was awesome and did exactly what it needed to do. Furthermore, I knew this was something marketers needed at the time to increase their own sales.
But testing showed that I would be better selling it at $27, which I didn’t want to do because in my view such a low price point would cheapen it.
Here’s what I did instead:
I offered 3 different versions of the software. Really it was all the same software, but with different rights.
The first version was just $17 and included rights to use the software on one website only.
Keep in mind the purpose of this software at the time was to build numerous small websites and monetize them quickly.
The second version allowed the buyer to use the software on unlimited sites and cost $47.
And the third version allowed the buyer to sell the websites containing the software, and cost $49.
As you can see from the pricing, the $17 was simply to establish value. Imagine if you wanted to use this on 19 websites. At $17 per website, it would cost $170. Or you could simply pay $47 one time.
The second option was to make the third option a no-brainer. For $2 more a person could sell the website with the software on it. The $47 price tag made $49 look like a steal.
You’ve probably encountered this type of pricing elsewhere. The lowest price is for a bare bones version. The highest price is for everything and more. The middle price is there to make the highest price look low.
And it works. We launched the software and it sold like crazy.
But a few people oddly enough did opt for the $17 and $47 versions, so it’s not like those prices were complete decoys.
Whatever it is that you’re selling, consider using two or three different pricing tiers to encourage people to buy the version you want them to choose.
For example, maybe you sell some kind of service. You could have a bare-bones $99 version that doesn’t do everything most buyers want. You could have a $999 version that does far more than most people want and is a lot of work for you. And in this case your sweet spot is the $399 version that is just right in terms of doing what the customer wants for a minimum investment of your own time to get it done.
Just like Goldilocks, you can steer people to the porridge that is just the right temperature for them and for you.
And you can also greatly increase your sales in the process.