I recently had the pleasure of interviewing Andre Weber of Simon-Kucher & Partners for the PricingBrew Journal. It was a wide-ranging interview and we explored a number of topics, from who to hire when building-out a pricing capability to collecting win-loss data to inform your pricing.
Along the way, we were discussing the benefits of offering a range of prices—a “Good-Better-Best” or “High-Medium-Low”-type spread of price/value options.
Naturally, the more obvious benefits in doing this are around the choice dynamics. By giving prospects options, you’re demonstrating that you can meet a range of budgets and needs. And when presented with options, prospects can be thinking about HOW they should do business with you, rather than IF they should do business with you.
While the choice dynamic benefits are pretty significant, Andre also mentioned another benefit that wasn’t clear to me before:
By putting forth a range of price/value options, you’re essentially training your prospects and customers to expect tradeoffs when doing business with you.
In other words, these types of price/value options are very clear demonstrations that your company expects that a change in price will necessarily carry a commensurate change in the value being delivered.
And in a marketplace where prospects don’t even like to think about tradeoffs like this, it seems to me that setting different expectations as early (and as often) as possible is yet another compelling reason to provide a range of price/value options.