Good, Better, Best pricing, or Goldilocks Pricing, has been around for more than 100 years.
Research has shown that when offered multiple prices, the customers will generally pick the middle price…some will pick the lowest and some will pick the highest.
This summer make sure your pricing reflects three options. This way, a customer who wants “multiple bids” can see you are giving that customer “multiple bids” to choose from.
Will your customers pay for Best? Or is Good ok?
Here’s one of my client’s experience:
One of my clients had never sold a high efficiency furnace. The technicians didn’t believe it could be done (part of the self-esteem issue I wrote about two weeks ago). When we established the good, better, best pricing and a technician offered it, his customer chose best. The tech was shocked. However, this started him on the path to being one of the best salespeople for the company. It totally changed his perspective.
Good – better – best pricing works.
The interesting question is what does best look like? (Best is in the mind of the customer – and it probably isn’t everything you think it is).
Actually, some customers will….assuming the perceived and delivered value is there.
Some will want the best. Most will want better. A few will want good.
Make sure that your employees understand the difference. If they don’t understand and deliver the difference, your customers will be confused.
Remember, a confused mind doesn’t buy. Or they go to the cheapest option.
Get testimonials from customers at each level. Put those testimonials in your marketing and on your website.
It’s easy to raise prices if you give customers a choice. The lowest price might be where your pricing is now. Just make sure that the lowest price is still at a positive net profit per billable hour.
Best can be the biggest gain to your bottom line net profit per hour.
Want a financial statement checkup?
Every business, large and small, can benefit from taking a closer look at its numbers. We’re happy to do a quick review – showing you what appears to be good and some areas you might want to pay attention to. (This is where Financially Fit Business can help too). Click here for more information.
And, pass along this offer to your business friends and colleagues who could benefit from this review too!
Ruth King is well known as “The Profitability Master.” She is passionate about helping small business owners become profitable and stay profitable. For over 40 years she has coached, trained, and helped contractors and others achieve the business growth and goals they wanted to achieve.
Contact Ruth by emailing ruthking@hvacchannel.tv.
