There’s a dumb mistake entrepreneurs make when they price their products and services…
…and it leaves a TREMENDOUS amount of revenue on the table.
Are you making it?
And if you are, don’t worry. It’s EASY to fix once you know what it is.
Don’t take my word on that though…
Instead trust the hard data and the real-life case study I share in the premiere episode of Social Triggers TV.
Case Study: Is The “Trade-Off Effect” Killing Your Average Revenue Per Customer?
Let’s take this a bit further…
Every business has three types of customers: customers who want discounts, regular customers, and customers who want the red carpet treatment.
And while the advice I shared in the video above might seem like a “trick” to get your customers to spend more money, in reality, all you’re really doing is ensuring that your pricing caters to each customer segment.
But what I’d like to now elaborate on is this: When you add a red carpet option, you’ll find that most people will avoid it. You’ll also find that people will avoid your cheapest option, too.
When people buy products and services they avoid the extremes (the cheapest and most expensive) and settle for the middle ground.
(I’ve got interesting research and data on that too, but I’ll save that for another day. So make sure you hop on my free newsletter).
Now I want you to do two things:
1. Leave a comment below this video and tell me about how you came up with your prices. I’m curious because one of the MAIN questions people ask me is “How much should I charge for [insert anything]?” And I suspect your experience will be helpful to others needing some guidance.
2. Open up your favorite email program, and send an email to 2 friends that says “Just saw this video about pricing. I think it will help” and link to this article.
And on that note, I hope you enjoyed the premiere episode of Social Triggers TV.
I’ve got several more videos in the pipeline, and another day lined up for shooting later this month.
So make sure you’re on the email newsletter (and subscribe to my YouTube channel) to ensure you don’t miss out on any of videos.
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- The paper I referenced in the video is called "Tradeoff Contrast and Extremeness Aversion" by Itamar Simonson and Amos Tversky. It was published in the Journal of Marketing Research.
- I first stumbled on the study about the trade-off effect in the book Predictably Irrational by Dan Ariely. To learn about more research just like that, check out this Social Triggers Insider episode with Dan Ariely.