A BIG TIP for pricing your services or products! You may have heard that you should offer three different pricing levels. But you probably haven’t heard about the right order to present them in. Behavioral Economics teaches us that we should present them in a counterintuitive order, with the most expensive item going first.
Tall, Grande, Venti
Check out this #tellthetruths video to hear Rebeca explain how that works.
This video originally appeared in LinkedIn
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TRANSCRIPT:
– Hey guys, we’re going to talk about business strategy, pricing strategy, really with this next video, which I call Tall, Grande, Venti. So there is a lot of advice in pricing products, especially really services that you want to have kind of a tiered, three-level offer. That’s why I call it a tall, a grande or a venti like at Starbucks.
If you have something that’s in the middle, people are more likely to think that’s a good value if there’s something that’s more expensive. So that people know. What I want to share with you is that I’ve been doing a lot of studying of behavioral economics and I’ve learned that you actually don’t want to present things, tall, grande, venti. You want to present them venti, grade, tall.
You actually, it’s really counter-intuitive because we’ve heard the other thing for so long. But you want to present a big fat juicy offer that’s like, “oh, that’s kind of a lot,” first, because then when you get to that medium offer for the same absolute price, the perception will be that it’s a better value because people have anchored on the higher value to start. Likewise, if you start lower, they anchor on that and that medium thing feels more expensive. So… kind of interesting. Grande is probably what you’re most likely to sell either way, but maybe more of them if you switch and start with your big, venti, juicy offer. Let me know what you think. Bye!
