Tired of your customers “shopping around?” Do this to get your customers to buy now

by Derek Halpern | Follow Him on Twitter Here

Single Option Aversion...

When a researcher recruits people from Craiglist for a research experiment, this is the last thing I thought I’d see…

…and if you’re in the business of selling stuff online, you’d be silly to ignore it.

Here’s why:

Nothing is a better demonstration of how fickle human behavior is – especially when people are deciding “Should I buy this now or later.”

Get the full story in this video, then keep reading:

Tired of your customers “shopping around?” Do this to get your customers to buy now. Click to Tweet

As you’ll notice, people went from “I’ll buy it later” to “I’ll buy this right now.”

What’s funny about this is this:

As an entrepreneur, you’re likely going to ask your customers for feedback. And they’ll give you feedback like:

“I’ll never do…”

“I would have bought, but…”

“If you just did this, I would have…”

When you’re starting out, you’re likely to take this feedback at face value…

…but as you’ll soon find that simply isn’t the case. Your customers are lying to you.

Not on purpose, mind you. They just don’t know the REAL reason that drives their behavior.

I’ve known this for years and it’s one of the MAIN reasons I started Social Triggers. To help peel back the onion of the human mind so hard-working people like you can benefit from it.

So if you’re not on the email list, make sure you hop on it right here.

Also – do me a favor and let me know how you plan on leveraging this in your business.

(If you want some examples, think about how some software companies show their product benefits… and their competitors. Think about how information marketers compare their prices to other comparable prices. And etc.)

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  1. Mochon, D. (2013). Single-Option Aversion. Chicago Journals, 40.

{ 126 comments… read them below or add one }

Paul French

“You can have any colour as long as it’s black.”

“Or red.”

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Brock

Nice haircut!

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Jim Wang

When I was working on landing page optimization for balance transfer credit cards, I found that the sweet spot was 3-5 cards with at least 3 issuers represented.

When there were too many to choose from, a lot of people would email the link to themselves presumably to “save it for later.”

When there were too few, I suspect either they already had that particular card or they were suspicious they didn’t see big name issuers they were expecting.

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Tim Goodwin

Thanks Derek brilliant content as usual.

We manufacture and sell an alkalising supplement.

Currently we have just the one option, a 500g tub (1 months supply)

We are about to create a 2nd product option of a 250g pack of the same product.

My question is how is it best presented on the web page… for example would we simply have a drop down box showing the different options? Or would you show two images side by side, showing the different product containers?

Do you think this will net the same kind of results?

If the percentages you show pan out in a similar way, this could easily TRIPLE our turnover!

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Andrea

Being in sales and marketing and a consumer myself, I find it better to see both options side by side. Not everyone looks at drop down menus so at first glance they would see only the one option. Better to lay it all out for people.

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April

I agree with Andrea – show both – this gives your audience an immediate visual. Have your graphics department put together a photo of them together, then have a drop-down box for which one they want to purchase.

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Andy S.

Can you give some examples of how this would applied in an e-commerce scenario? For example, if we sold coffee mugs. For example, if we had a steel coffee mug…are you saying offer it in black as option 1 and white as option 2? Or are you saying to offer a basic steel coffee mug and then offer a a more advanced steel coffee much (like a self cleaning one)?

Or are you saying something else?

I will assume you’re just talking on a product by product basis because an e-commerce store needs to have more than 2 products.

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Colette Nichol

I’m thinking that in the mug scenario, the best bet would be to do as apple does. Have two or three colors at one price and quality level and then the same two or three colors at a higher price and quality level. And do this for every single product you offer.

P.S. I want the self-cleaning steel coffee mug!

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Shock Marketer

Giving the customers a choice make them feel like they’re in control. With only one option, the choices are decline or buy this one item.

Do you have a link to the study or to the survey?

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Lacey

Derek posted this immediately above the comments. You can google it:

Mochon, D. (2013). Single-Option Aversion. Chicago Journals, 40

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Shock Marketer

Thanks Lacey, I didn’t see it there before.

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Aimee

I have a product to teach coaches how to do JV Gift Giveaways to build their list. For me, I want someone to teach me how to fish so I can then fish as much as I want, which is what the product is for. Some people want the fish caught and cooked for them. So I figured out how to do a done for you version that is 3x more expensive. I haven’t mentioned this on my sales page because I don’t actually want to do that many…however, perhaps offering the two versions will help people make a decision to choose one or the other. And if I get too many of the done 4 you, I can always put them on a waiting list I guess.

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Michelle

If you get too many done-for-you orders, you can also always raise the price. :)

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Angela

Hi Aimee!! I’m curious about your product. Can you link me?

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Hector Cuevas

I actually saw a slight boost in sales when I added the 7 day trial for $1 for my membership program. At first I was just offering a one year subscription, so that small change helped.

I’m also going to be relaunching my Blog design guide with 2 or 3 different packages. Wish me luck..

Great video Derek

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Jason Gracia

Love this video, Derek. I’ve often heard when only one choice is available, customers compare buying to not buying, but when given options, they psychology shifts from buying this to buying that. Slight change, but incredibly powerful.

With my series of Six-Figure Expert courses, I offer the basic version of the course as well as the course + a VIP coaching session to help with implementation.

Once again, excellent video today!

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anne

great advice!

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Sarah

I actually do this already – I’m a web developer who also offers hosting. My clients can choose between a basic hosting only option and a higher priced option which bundles in some other useful ongoing services too. It’s a typical “alternate close”. When you ask someone if they want one thing, it’s a yes/no answer. When you offer two options, “do you want X or Y?”, the answer is more likely to be X or Y than no.

I’m beginning to look into offering options with my development work too rather than just giving a proposal with one total price.

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Diego Lucero

Great comment.

Just curious, what sort of options are you considering offering with your development services?

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Sarah

Thanks, Diego!

I’m thinking about how best to structure my proposals so that I can recommend additional services or development work alongside what I’ve been specifically asked to quote for. Optional extras. As an example, someone who wants a website might also benefit from a branded email template I could develop for them. I usually mention these sorts of things when I meet with a potential client anyway, but actually seeing how each part of the work will affect the total price might help them. Still mulling it over!

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David Parrott

I build and market websites for my customers. I *always* write two options into my proposals. We call them the “coffee or tea” proposal. There’s no “do nothing” option in the proposal.

The first option shows the specific requirements they’ve told me about, broken down line by line (with prices).

The second option includes all of the above PLUS elements that I recommend they consider because I believe will enhance the effectiveness of the solution for them (also with prices).

I show them these options in a table with two price columns. One shows the basic option (what they asked for), the other shows the advanced option (what they asked for plus the options I recommend). They can see the totals at the bottom, and can easily do their own calculations to see what happens to the basic options if they add any of my recommendations into the mix.

If they’ve been willing to share their planned budget, then I try to make the first option as close to their budget as I can. If their budget isn’t high enough for what they’ve asked for, then my detailed breakdown either lets them quickly see which features they could cut in order to get within their budget OR helps them make the decision to increase their budget to get what I’ve proposed.

The customer feels two things when I show them these options. First, they’re pleased that I’ve given them a price for what they asked for (i.e. I’ve *listened* to what they told me and reflected that back to them accurately). Second, they can consider all of the options and make their own decision about what they’ll sign up for (i.e. they’re in control).

My experience with this approach is that the customer will usually end up with at least some of the recommended options, sometimes but not always at the expense of some of the standard options. It is rare at this point in the sales process that they decide to go somewhere else, because they’ve appreciated the detailed breakdown and reasoning behind my recommendations.

The other benefit is that the customer now understands what each piece of work in their website costs. When they ask for something additional later on, they are much more likely to have realistic expectations about what it will cost them. And, because I’ve broken the project down into discrete parts, I can also be very clear about what is and isn’t included in each for the price I’ve quoted, so scope creep is reduced.

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Sarah

David, thank you. That’s super helpful.

I have one question, if you don’t mind. When you say you present the two options with prices in a table, how does that look? I’m concerned that if I tried to do something like that I might end up making it look too complicated or messy. I’m a big fan of clean and clear with plenty of white space :)

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David Parrott

Hi Sarah

I create the table in Word with 3 columns. The first describes the options. The last two have the pricing for options 1 and 2. I have a formula to automatically sum the totals in a row at the bottom of the page.

I sometimes include additional columns. If the table is the summation of a full proposal, then I add a column after the option descriptions and use Word’s cross references feature to enter the section number that each option relates to. That allows the customer to quickly flick back to that section. Also, when you do this, Word inserts the section number as a hyperlink back to that section so the customer can click the link in an electronic copy of the document and be taken to that section instantly.

If I’m feeling particularly industrious, I’ll insert two more columns, one to the side of each of the price columns. I make the columns very slim and then fill them with color for each row. I use this color coding to indicate to the customer whether that feature is included in the pricing column for either Option 1 or Option 2.

The table doesn’t look overly messy – the key is to summarise the proposal you already wrote earlier in the document, not to write it inside the table. That means writing very succinct descriptions in each row.

Sarah

Thanks so much for answering my question, David. Insanely helpful! I love finding ways to improve my proposals and my business in general – I’m definitely going to implement some of this!

Zach

Hi Sarah,

Here’s an example of how I present multiple pricing options on my website.

I keep it pretty simple (But, if you hover over each individual item, more details are shown).

If you need help setting this up, just let me know.

I hope this helps.

Sarah Jordan

Great tip Derek. I’m sure you’ve read the jam/jelly study about too many choices. What do you think is the perfect number of choices?

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Philip Bruley

Great stuff! I am in the process of re-doing my coaching website and have always offered only one package. After this I will definitely be presenting 2 options – a Basic and an Enhanced. Just need to nail down 2 cool terms for these.

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Juliana

For my coaching service my sales calls improved when I offered coaching by the hour (a la carte), a five session package and a ten session package. It worked out really well. When people only considered whether or not to by at all, many would opt to wait. When offered a per session rate or a discounted multi-session package, more people purchased! Best of all, many purchased the multi-session package!!!

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Leighton

Excellent video. I’m coming out with an ebook on Data Privacy which will target a business audience with various resources and internal policies. We’ll offer at least 2 options, maybe including a 6-month subscription to law updates in the premium version. Is there a benefit to offering even more options? At some stage it gets confusing and people would once again defer their decisions.

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Martin Stellar

Nice one, Derek.

I’m doing something like this at the moment.

The premium option: Landing page, sales page, site conversion review, traffic strategy review, and one email per day, written fresh.

The second offer is the same except I don’t write the daily emails – the client writes those and I give feedback on each of them. Saves a lot of money, still useful.

Now just to write the salespage for it…

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Kent Sanders

Derek, you have talked about the tiered pricing strategy before and this is a great reminder of its power. I am putting it into practice when I launch my Take Note System on Feb. 4. It’s an Evernote training system designed for writers, artists, blogger, podcasters, etc. – anyone producing content.

I will have the basic level at $47, the next level (with all the bonuses) at $97, and the deluxe level (that includes personal coaching) at $297.

Your content has been a huge help!

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Andrew Turner

Thank you for the video… straight and simple. I thought I should share that I find myself flooding my clients with options and too much information. I think that’s the engineer in me that wants all the details but it isn’t the norm for them nor is it what the consumer wants. I have to keep reminding myself to simplify. One of the things I did on my proposals was to provide a choice and give peace and mind regarding my fee where I provided them the option to either pay me a flat fee for my service(s) or base the fee on if I save them “more” money. We then split the savings in half as my fee. Now they have a no brainer decision because they “pay only if they save.”

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Diego Lucero

This is definitely helpful.

I think that naturally, must people are trained to expect choices. When the is only one choice, sometimes people can become leary about whether or not the service provided is legitimate.

And if they have made a choice as to what service they wish to purchase, many people expect to be able to haggle on the price in one way or another.

Having another choice helps in that negotiating process, where another level of service that is more appropriate for what they desire is available asa bargaining chip.

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Katrina

Hey Derek. I wish I could understand the video but I am profoundly deaf and rely on subtitles to understand what you are saying. Some of your videos are subtitled which is why I signed up for mailing list but as I stuck around longer I noticed that not all of your videos are subtitled.

Is it possible you could get all the videos subtitled? I understand it will be the extra work for you or the team but I would love the full access to your fantastic advice. I run a small business full time and understanding your videos will massively help me.

As for auto english captions, it doesn’t come out great just the same for the rest of the videos in YouTube.

Thank you!

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Clayton

I am building a web application. First option, use our free “widget” on your current site.. Second option, sign up for our full featured package and enjoy your own website with the functionality that makes us unique. Great information… keep it coming D.

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Jason

I’ve seen research that says to use 3 tiers because most people will inevitably choose the middle most of the time. They will see it as a good value between the bargain one which they will generally see as not enough and the top tier one which they may see as too much. Did you test this as well?

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Carly

Oh-so-fab. Thank you for this.

Derek, I’ve been thinking about this since being introduced to your work (admittedly recently). I’m wondering how I might apply the concept to my freelance copy-editing business.

For example: Might I offer a basic proofreading service at, say, $3 per page and a more in-depth editing service at, say, $7 per page? Or could there be another way to apply this in my industry? (I’m cautious about publishing my fees on my website, as some projects require a great deal more work and time; I generally prefer to give project-specific quotes.)

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David Shillito

Hi Derek

I’ll bet you’ve read ‘Predicatably Irrational’ by Dan Ariely which is full of the ‘why’ this works + amazing examples (The Lindt Truffles vs. Hershey’s Kiss test is an eye opener: changing the price by 1 penny made most people change options!)

Sell more of your higher priced option by adding a 3rd even higher priced option – thereby positioning your previously premium option now as the middle choice = usual favourite!

Lots of info on ‘decoy pricing’ too, such as how ‘The Economist’ use it for subscription sales.

I recommend ‘Predicatably Irrational’ by Dan Ariely to your subscribers for lots of great insights & examples on price positioning, decoy pricing and how to leverage human nature in your pricing strategies

Cheers Derek

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Krista O.

I was wondering when someone would mention Dan Ariely’s work. He and his academic team (Duke University) continue their studies into human behaviors and economics.

I second your recommendation for “Predictably Irrational”!

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Bob Hessler

Not sure how valid this study is, as the people did not actually buy anything. (Three frogs on a rock, one thought of jumping off, how many left.) However the results do correlate with other studies I’ve read about that tracked actual sales. My recollection is that the optimum is 3, and that for different priced items, the 3rd (premium) option increases sales of the middle-priced option. I’d like to know if your experience agrees with this.

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Tim

Derek, One way this could easily be implemented, and what I plan on doing with my new business, is offering multiple opt-in newsletters. Give people 2 options on what to keep up to date with, backlinking strategies, or SEO news. If I only provided one, they get both but would be less likely to sign up. If I provide 2, they can choose what they want to keep up with and I will have a better chance of getting them signup.

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Katie

Love this video. It was great to keep it super simple too. I previously read Predictably Irrational by Dan Ariely and he covers a lot of consumer behavior. The book is so compelling and filled with valuable info, but it was enough to confuse me on when it came to practical implementation.

It never ceases to amaze me how much we live our lives in comparison in every single aspect.
K

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Layla

Hi Derek! This brings up a question for me because I sell an online training product – now, I could offer two training products, or two versions of my training product – but the example you used was two different brands – I’m wondering then if it’s enough to have two levels of the same product, or people want to feel secure that they’ve seen what’s out there – would this mean that if I partnered with someone else who made a similar training and we sold them side by side to our lists that could be a potentially bigger sales outcome than if we tried to sell each product individually? I’m wondering if this could make a difference with affiliate marketing programs….

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Lacey

Well, I offer two services: B2B Ghostwriting, with two options: a full book / eBook with 5 chapters, 200 pages max, or mini-book / eBook, 35 pgs max.

Then there’s B2B Copywriting, with options of creating or enhancing your web content. Period.

Options within my four eStore pages range from slogans to infographics & pitching presentation templates. I mainly push my digital eBook store page [6 titles].

Thanks, Derek, as always for such priceless info.

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Monty

Can you provide a link to the study? I’m pretty sure you’re drawing the wrong conclusion. You’re saying that the study showed consumers two competing products; the Sony and the Phillips DVD players.

This isn’t the same as giving customers two pricing tiers. That would be like showing the consumers two Sony DVD players (cheap and expensive).

The takeaway message from the study is that if you’re an online retailer, show your customers competing products that you carry in your store so they can do their research without leaving your site.

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Jim Munchbach

I’m going to apply this strategy when I roll out my next training/coaching series for Sales Professionals.

Free | Buying Option One | Buying Option Two

My Landing Page has a 3 column layout — I might look at a 2 column layout because this piece of research is so compelling.

As always, good stuff Derek!

Thanks

#MunchMac in Houston, Texas!

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Jeff Harrison

We are ironically just beginning to do this, offer only two. As you mention bare bones and full service.
We create online review videos for small businesses, then host them on our site (mycitybusinessreview.com)
In the bare bones
create video, redirect traffic to us. FREE
Create video, redirect upon conclusion back to clients choice, get this video and their business on page one of local google search up to 20 cities. $350/$55 per month
Finally our Premium if you will…same as above with the following additions:
we create a funnel to help build database
we also create and distribute weekly content management
which includes writing a monthly blog post $350 /$199 per month

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Stephen P Brown

Have seen this before, but now there’s research I’m hooked. Thank you for sharing it, Derek.
My new website will go public in March. I’ll be offering a Membership at $3 per week for notification of new episodes, a copy of my data sheet and convention discounts, and Apprenticeship at $7 per week to join a weekly mastermind teleseminar, further research resources, and event listing tools. Once an Apprentice, there’s a funnel for Insider and Master levels, as well.
Hope this is specific enough!

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Jeannell

Going to work on quickly developing a few new product options for women with different hair types to choose from.

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Mike

Jeannell-Would love to find out what you come up with!
Mike
Rinse Salon
rinsesd . com

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Belinda

Great video!

The company I am with offers three levels of starter kits. I promote the heck out of the Premium Kit ($150), because it is the best value and you get the most extras and goodies along with it, but rarely mention the Basic ($40) or Standard ($75).

I never thought of the $150 price point as a barrier to entry, but after watching that video, I’m going to do some A/B testing and run my next promotion featuring:
A: the Basic and the Premium kits
B: the Standard and the Premium kits
C: all three (Basic, Standard, Premium) kits

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Allison Yaholnitsky

Belinda,
I think your testing ideas for your starter kits is outstanding!
The format that you intend to use has given me the idea to create a promotion similar in application. It is a little different in my industry, so I am going to have to figure out a way to accomplish this type of promotion. I do hope that you will post your findings on how this works for you.

I am very interested in your findings!
(and very much appreciative)

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Jim Munchbach

As an online seller of service, this research makes me think I should post my competitor’s product/service right next to mine (on a Landing Page) and let my customers compare my product/service with my competitor’s…

If they buy my competitor’s product, at least I’ll get the affiliate commission.

Just an idea…

#MunchMac in Houston, Texas!

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Nancy P

Yes I do do this…. my market research firm offers full-service or a-la-carte services! Clients love this…. thanks for the insight!

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Rose

Thanks Derek! This makes total sense. Even if I’m shopping for clothes hangers, I get annoyed if there’s only one option to choose from. So having limited options is a happy medium between too many and just one.

2 ways I’m going to use this single-option aversion insight immediately:

1. I’m building an ecommerce site (have the products, just setting up all the listings). As I go, I’m writing blog posts to highlight benefits & tips on using specific products. Today I’m going to go back and add in other similar products they could use for the same purpose – so while the post is about product A, they can also check out B and C and feel like they’ve done more research/have more options.

2. I need new photo equipment. I’ve been researching a package for my boss to approve, but now I know about this, I’m going to give him at least one more option so he can choose rather than be forced to say Y/N to the one I suggest.

Thanks, Derek!

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Peter Bowden

Oh, instead of publishing the ONE e-book I have in progress, now I think it makes sense to break into TWO shorter focused titles exploring different dimensions of the same larger theme.

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Philip Bruley

Read a couple of comments about 3-tier pricing and people choosing the middle one. Good stuff.

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Megan Reile

Hi Derek,
Thanks for the great video, as always! I plan to put this into play for 360Alumni, a networking and engagement platform for higher education.

Typically we have offered 2 pricing options, but they’ve essentially been the same price. Clients could choose either a month to month payment plan, or a yearly subscription.

After watching today’s video, I’m going to change the approach by creating an advanced package with additional marketing support, and a basic package without these added features. Can’t wait to try it out!

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Lara K

Perfect timing! I’m working on creating a new resource for my audience and was debating whether to offer only a digital version or also provide a print option. You helped make the decision clear – because I can create a premium customized print version that allows me to present two tiers of options. I can’t wait to see how this plays out.

Thanks for the great information!

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Melissa Burkheimer

Love the research in this video!

I have 10 local clients that I work with on an hourly basis providing creative direction, graphic design and social strategy services. When I work, I get paid. When I don’t do work for them, I don’t get paid. It’s not working anymore.

So, next week I’m going to offer each one a very basic package and a VIP package when I notify them that effective March 1 I’m no longer available for work on an hourly, as-needed basis.

Thanks so much for your genius insight!

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janet

Melisssa,
Like you, I work on a project basis. I’d prefer to have retainer clients. So I offered my latest prospect both possibilities and will work to graduate the current clients to retainer status, with two-tier services.

Janet

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Taleen

Hi Derek!

Great video (as usual!). One thing, I remember a previous blog/video you had last year regarding I think “the #1 pricing mistake we make” and it demonstrated the use of a 3 tier system. Which do you find the best? 2 or 3 options??

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Steve Borek

I’ve been using the multiple option approach for some time now.

I started with three then paired it down to two.

People like choices.

Sometimes they opt for the premium plan while others want value yet don’t want to pay full price. I provide the option to satisfy that need.

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Chris Lalor

Hey Derrick,
Great Video! It’s hard to stand out when your competition offers the same products and services. When you get quotes for life insurance online most websites require your contact information before your allowed to see quotes. Some will collect your contact information and not even give you quotes. In the end, the client receives a lot of follow up calls and emails when all they wanted to see was what it costs there on the screen. I have tried to develop my website http://www.lifeinsuranceshoppingreviews.com so people have a choice. Your contact information is not required to see quotes on the screen and it is your choice if you would like a call back or not.

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Jenny Spring

I offer online small business training courses. I provide 3 pricing options, so that the business owner can choose whether they want the basic level – no frills, the second level (most popular), or the top shelf level which is very expensive and includes my time wrapped into it.

It works brilliantly, and my strategy is to drive more sales in the middle level.

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Jennifer Hazen

Hi Derek,

For 20+ years, I’ve help clients ‘dig out their shoeboxes’, especially before tax time. Most clients just hand over their work, and I do it for them.

This year, I’ve added a second option, Share The Workload.
This service offers small business and self employed people on a budget, the opportunity to work with me at a lesser cost. They learn how to do the prep work of organizing their financial paperwork into a proper system, for their bookkeeper or accountant.

Thanks for another great video, it’s very timely. Happy New Year!

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Jennifer Hazen

Mea culpa! Upon re-reading my comment it sounds like shameless self-promotion. Sorry! The second option is only an experiment and time will tell, if it works or not.

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Jessica

I’ve read that 3 options are best, and most people will choose the one in the middle. What do you think Derek?

This research is nothing new, but serves as a good reminder that we don’t want to go too broad with our product or service offerings. I am still striving to narrow mine down from business plans, market research and white papers just to business plan writing and DIY business products. But I find it’s a lengthy process because I have excellent clients in the other areas who I’m not ready to alienate just yet.

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Dave Rosenthal

ALERT, the link was not a promo for myself but to gather feedback!

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Esther

Is there any concern about devaluing your original product by offering a VIP product? I sell HypnoBirthing Classes, I do private classes or group classes so I guess that could be my choice but I’m considering a VIP group product that would include an additional private session or some other added benefit but I don’t want it to look like my regular classes are not sufficient on their own.

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Dave Rosenthal

I may decrease my service package from 3 to 2; seem like I may just drop my low end package.

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Wanda Ball

Love the video and it will be used in the future when I plan on using this for my eclass package for my up coming book “Salt: Rekindle and Reclaim Your Power Within”. But, how do you take advantage if you have a book to sell?

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Jessica Michaelson @DrJessica

3wks or 3months – all private coaching for now. Corbett Barr suggests 3 options, which helps people choose the middle options. So maybe: 3wks, 3mo, 6mo.

Thoughts, Mr. D? Care to go toe to toe with CB on the matter?

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claire stone

Super succinct, and super useful. I’m working on my Big Poop Solution program at the moment, and have been toying with the idea of having the basic program, and offering a higher lever version with actual coaching from me. I was going to wait before offering the higher level to see how it panned out, but if it’s going to make a difference to just how many people sign up for the basic one, then I’m totally going to offer the coaching one at the same time.
thank you sooo much!

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Gal

Cool.
I intend to offer individual and group sessions. Simple…

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Brenda

HELP!
I have one brand but many different styles/colours/sizes available.

How do I narrow down the options to make it easier for my customers to choose?

I have thought about making a sale (even though you say not to discount products) but with only 3 choices – but I’m just not sure how to carry this off effectively.
Cheers

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Guy Ferdman

Great advice as always DP. Thanks brother, will definitely be using this tip!

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The Get In Shape Girl

Sweet! I am ahead of the game then. I have 3 levels of service for my clients to choose from.

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Leigh Shulman

Hmmm… how to implement this in my Every Writer Needs A Reader editing/coaching?

I currently have a few choices on my site. They’re separated onto two pages and offer three separate options. Support for bloggers. Support for Creative writers. Then a separate page for support for freelance writers looking to pitch.

Based on what you say here, I think I need to clarify what each service does and then change the layout of the writing services so people can see both options at once.

Then for the pitching support, I’ll develop an online course so people can either take the course without my help or purchase my current pitching package that includes three one-on-one sessions plus written feedback from me.

Thanks for that. Both for the information and the kick in the butt to work out the details. Now to Evernote to add to my to do. :)

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Rachel

I am trying it on my blog right now- I have decluttering charts, so am offering it free if they purchase a decluttering book as well. Hope it adds to sales!

Now I need to bundle my recipe books and see if that helps them sell.

Thanks!

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Joan

I can totally understand this. It is like going to a restaurant with too many choices. I am in the process of putting my packages together. I have narrowed it down to four starting with the Elite package and ending with the Basic.

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kelly

so fascinating to explore how choice influences purchase behavior.

there’s a bit of a disconnect for me in this example though… they were given instruction to evaluate a single product, and choose between two practically identical competitors.

consultants/freelancers selling services are a different case — it’s not about offering two nearly identical options…the advice is to consider offering tiered products. is the psychology the same? would love to know your thoughts!

you had a video a while back that talked about a friend who had positioned his less expensive options next his more expensive — it was a really great example of why a portfolio approach to product development works so well (both for online freelancers and the branded fortune 50 alike!)

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Sid Kassidy

Awesome as always Dereck! Thanks!

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Kevin O. McLaughlin

Nice video!

Helps to explain another reason why books like mine (fiction) tend to do better in sales when there are BOTH print and ebook editions available.

So for my bit – I’m going to pour a little more focus into ensuring I have print and ebook editions available for everything possible. Everything long enough to get a nice print edition is going to get one.

Which gives potential buyers two options to choose from!

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James Zedd

2-product implementation strategy:

Buy my online course for learning how to write copy. You’ll get daily emails with assignments that you’ll need to complete, plus live access to me via email.

OR

Buy the premium online course for learning how to write copy and you’ll get everything above PLUS a 3 month membership to my inner circle where you can post your thoughts about the assignment to others plus write your own copy letters and have them critiqued by my inner panel of experts.

Great post Derek.

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Shanika Journey

I read a similar explanation in “Tested Sentences That Sell” there was a chapter about giving options similar to what you mentioned. Elmer Wheeler also brought up giving two choice will increase a higher chance of buyer picking one of those choices. So, I find it pretty cool you got the studies that also show it’s true. Cool vid!

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Meredith Eisenberg

People like choice – but a confused mind never buys. We are unusual in our space (we sell a white label e-mail/CRM service). We have three levels…

Level one – access to software

Level two – pre-done e-mails and landing pages, plus laser coaching and webinars

Level three – VIP done for you

But after your video thinking of dropping that to just options 2 and 3.

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Whitney

Hi Derek, I already followed your great advice about not offering too many options. (The research findings that offering tonnes of flavours of a product reduced sales). I offer about 2-3 options for each type of furniture, like dining set, day bed, sofa set.

Thanks Derek.

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Lucio

I sell PLR articles at my store and I show buyers two options: Buy a full pack with many articles on a certain topic (with bulk discount) or buy articles individually, without the discout (I haven’t seen no one in my niche doing that). I have a a 6% conversion rate and I think it works pretty well.

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Zita

Hi Derek, I knew I had to watch this video. Thank you so much for creating great valuable content.
I teach wellness for mothers. These days I’ve been contemplating creating a mini training on Learn to meditate Daily and my main offer will be a total wellness package. That way if people are not prepared to buy the big deal they can check out my short simple meditation training.
Now I just need to start working :)

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Melissa Klein

Hi Derek, This makes me feel better – I’m launching two different workshops – ARTiculate & Art Lab – one is for people to tell their story and the other is for aspiring artists to advance their careers. I’ve been stressing that this will confuse people and cause them not to want to buy into either of the workshops – it’s great to know that quite the opposite will be true. http://www.melissaklein.com

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John Williamson

In our boat cleaning business we quote for a gold and silver package whenever possible. We’ve found two benefits:

1. Most people go gold (who would give their pride and joy the silver treatment?)
2. We don’t get asked for discounts when we use this 2 option approach

Also, if you’re competition is cheaper than you it gives you a chance to offer something closer to their price and clearly highlight the additional value of your better service.

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Shaun

Hi Derek, I think 2 is better than one, but 3 is better than 2, but 4 is NOT better than 3. I gave a good customer yesterday my premium price, but thought he might baulk at it, so offered him a second option that was a thousand bucks cheaper. I kind of regret today, not giving him another supercharged luxurious offer (the guy is a multi-millionaire). So the sale would go along the lines of:

PRICE A: would be my Top Dog, all the bells and whistles price, with lots of extras and luxury in there. If you get this price, it’s an awesome piece of business

PRICE B: your ideal price target… where you don’t throw everything in, you give them what they’re asking for and you will do well and deliver a good job and have a good margin of profit to go with it.

PRICE C: is the SAVER option, if the customer needs to save bucks but still wants to do the job. This option usually is standard spec work but you have to cut a few corners in that you let the job be programmed in India / Romania, so as you’re still making a buck.

In the 3 prices, you hope for PRICE B… but all 3 still will make your business tick.

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Lesley Beagley

Hmm… very interesting! I have always been taught to offer three options… one to be thrown away leaving two to choose from, the very act of throwing one away already creating the feeling that you ARE going to choose one of the others.

However, in an effort to keep things really simple and focussed, my new P.A.I.D Formula online programme for business owners to streamline their businesses and be more efficient initially launched as a one-level only, with my intention being to upsell to VIP or Master Member later on (those who pre-registered got a free upgrade to VIP) but now I am thinking I should present all three options on the main sales page instead….or should I just stick to two as per the advice in this video??

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Alejandra Ruani

Fascinating! However, the cited research is targeted to brand comparisons, and doesn’t cover same-brand options, correct? Studies on same-brand options would be helpful.

One of my businesses is a distance learning institute for higher accredited education. The way we implemented this strategy is by comparing our educational experience to that of our direct competitors in a very visual chart with ticks and crosses for each item (blue ocean style). Our conversion rates increased massively.

When I was about to sign up to your program, I would have wanted to know how it compares to Neil Patel’s or LKR’s. This would have helped me make up my mind on the spot.

I’m sure there are quite a lot of people hanging around between these programs because they can’t understand the differences. And as Marie Forleo says: A confused mind always says no!

Great post, love your practical advice!

Best,
Alejandra

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Missy Cooke

The timing of this video was perfect. I am currently rewriting my sales page and was focusing on only selling one service from my site instead of three. The other packages are still available but I wanted to use this specific service as a pre-qualifier for the larger packages.

Part of the service is a custom report written specifically around a customer’s needs, situation, and experience. I was struggling with keeping this part of the service or not because of the extra work involved in building the report.

Now I’m considering making the service a ‘basic’ or ‘premium’ where the premium package involves the custom report, tailored specifically to individual need.

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Lou Johnson

Hey Derek, I pitch my talents as a Juggler, Magician, Stiltwalker for potential clients. Then if they say, “That’s too much”, I offer my wife’s clown, face-painting, balloon animals to them at a lower rate. The plus is that, I still come across as an expensive performer and WE still can get bookings by saying YES to them. BTW- button your shirt up. Your white undershirt was showing. Either that or match the undershirt with the dress shirt that you are wearing. As a performer, I’ll tell you, the DETAILS are important.

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Sherrill Church

Hey Lou – I’m not even going to tell you what’s going through my mind right now!!!!
Mimicks Face Painting UK, est 1990

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Fernando

You gave me only ONE option: “Comment below”
So I I will think it over.

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Nemy

For a language course: learn Japanese in one month versus one year.

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Mandi

How I can implement:

For people who are a good fit, right now I offer just one option: 6 month Path to Scalable Growth program. Then I offer 3 month if I hear some hesitation.

From now on, I will package my 3 month coaching to be geared toward helping them break down their service to be more like a product- and scalable. The 6 month towards making the whole business scalable.

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Lucy Parsons

I make handmade personalised pillows for children. At the moment I offer the option of buying with or without the pillow pad. Many people in far off places decide to buy without the pillow pad to save on postage. However, I am working on a new range of pillows that just have the first letter of the child’s name on them and will be cheaper than the pillows with the whole name.

How do you suggest that the choice is presented? E.g. Option 1 – beautiful and affordable; Option 2 – the deluxe option?

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Shae

Hey Derek

Great video. I’m curious though. I’ve heard you speak about the 3 x 3 rule in Marie Forleo’s B School and in another of your video’s with Sheena Iyengar in order to increase sales. What situations would you then use the 3×3 rule and the 2 option rule as you discussed above? Would having 3 option be too many now?

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William Beem

I think this highlights something I’ve observed on one of my sites where I sell eBooks. One of my products has two versions – the eBook by itself and the eBook with a video for a higher cost.

Most people buy the video, or the more expensive version. I always thought that was because people prefer to learn by watching instead of reading. However, your video brings to mind that this product is also my best seller over other products that have only one version.

Mine is a very small site with little business, but this helps me decide how to construct future products, and also how to enhance some of the other products with only one version. Thanks.

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Cluny

Hi, Derek,
How would you implement this when you are selling a product like jewelry? Do I put only 3 ruby bracelets on a page? I’m afraid I have too many choices, but it seems that’s a necessary evil with what I sell.
Thank you!

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Carlos

Wow great info Derek!

I think that three is actually the sweetspot… and as many Behavioral Economics scholars mention, you may Nudge people into buying one of them.

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Shawn

@ Shaun

I like

“PRICE B: your ideal price target… where you don’t throw everything in, you give them what they’re asking for and you will do well and deliver a good job and have a good margin of profit to go with it.”

Thanks for the posts and comments.

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Maciej Fita

I think it is important to effectively hit emotion points on a website so your brand makes a connection with your audience.

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Paul

Coincidentally, just last week I started adding 2 hyper links to my cold emails.

We produce amazing business videos – short duration “explainer” films for software and app dev companies, as well as book trailers (think movie trailers, but for books).

Using the “Tout” app, I can see who opens an email. I did see a big increase in people that not only opened the email, but then clicked to view “both” videos – and have a new prospect who emailed back “THESE are cool!” (Emphasis on “THESE”).

I think I am seeing more response than when people only had 1 hyper link to 1 video in my portfolio.

Plus they are spending more time on our page thinking about us.

Also got a few either “we’re a year away” or “we just had one made” but both saying they’ll consider us for future use.

Not sure if I have a sweet spot though. I might go for 3 links.

Old school: one of my first jobs was working at a family-owned shoe store. The owner taught me when selling shoes (especially to female customers) to only bring out max 3 styles at a time – not more, not less. Too many options, they could not decide and left. Too few options, they lost interest.

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Milos

Not only could you focus their selection you should focus yourself on providing superior quality product, service and exemplary customer service.

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Jackie Ulmer

This is great. My plan, unless you advise otherwise is to take 2 existing products, and offer them as a combo.

So, on the sales page, you can get product A for $47, or you can get Product A and B, normally retails for $74, buy now for $64 or something like that. What do you think about that?

Is that in alignment or adding in another element?

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ScrewtheSystemJoe

As always, great video Derek.

Am thinking of selling some packages on my website and watching your vid just confirmed what I should do.

One deluxe package with books, t-shirt, course videos and forum.

One standard package with just a book and access to the forum.

Thanks for the clarity!

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Isaiah Hankel

Great advice. I love the idea of doing a “red carpet” treatment package as well as a standard package. If one is priced significantly higher than the other, it makes the decision easy for customers. It also makes the lower cost option seem like a great deal to people who don’t want to spend a ton of money.

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Cathy

Thank you for this! I have been working with a couple different high power coaches. I have several different options as well as a red carpet…they thought I should delete everything but the red carpet. I have found that lately, my customers who are not ready to commit to or afford the red carpet product are buying the individual products. I couldn’t do it. I took some of my products down…but I left some up. Maybe what I need to do is offer my red carpet product and feature parts of it each month as an individual purchase with an option for an upsell. This lets them dip their toes in…fall in love and then get the really good product. I appreciate the way you back up what you say with facts.

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Jason

It’s not just about offering options, it’s also how you send the message on the quality of each.

If it’s “Option One” “option Two” and “Option Three” with increasing price and value, then you offer people a clean decision that they can make on features.

If you label them “Bronze”, “Silver” and “Gold”, you send the message “I only want you to buy Gold, the rest are c-rap.”

Jay.

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Alan

Makes perfect sense – people like to feel like they’ve been given some optionality (but not too much).

I think you already mentioned that people also don’t like too many options – on that note, this is worth a look if you haven’t already seen it: http://www.ted.com/talks/sheena_iyengar_on_the_art_of_choosing.html (I’m guessing you’ve got to be familiar with that but perhaps some of your readers aren’t).

I find 3 is a good number (for most things). It’s actually like magic.

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Shaun

Great article! I am in sales and discovered this a while back. When I began to offer 3 levels of service that are pre printed on my closing sheet I soon noticed people making decisions faster on my first attempt. I label them “option 1″ “option 2″ and “option 3″ and most seem to gravitate to the middle “option 2″. I personally did not label them “red carpet” or something similar because I wanted to avoid people feeling bad about their choice if they could not afford the higher plan.

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David

This is true…I was looking to buy a smart phone and Samsung has as many options as their are stars in the sky: Galaxy, Neo, Ace, Grand, Win and so on. All different screen sizes, all different stats. I ended up buying a Lenovo. They had three options.

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Ivan Widjaya

What’s even more tricky is that the sweet spot may vary depending on your niche. You need to do your own research and ask for your own feedback to really know what is happening and so that you can hit your sales.

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AJ

My partner and I run an online business involved in professional logo design, website creation, and SEO help. We currently leverage this multi choice concept when offering package deals.

When someone who is looking to invest in their own website visits our package deals page, they see 3 different tiers. We offer a bronze level (bare minimum amount of work), silver level (website plus “done for you” online promotion), and gold level (for those that want the “red carpet” treatment).

On our other pages, we list our services and prices and then near the bottom of the page we show competitor prices. I think we’ll show competitor prices 1st and then our lower prices following. From reading other resources, I’ve learned it’s best to show the higher price option 1st so that the lower price option is perceived as a good deal.

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Russ Law

Hi Derek,
I just found your videos and am finding them SO useful.
I make animated white board style videos using digital methods only, and there is quite a bit of competition.
I just emailed a client and explained that I really throw myself into each project and can only take on a maximum of 6 each month. With a couple more lines I explained why I cannot lower my prices.
Russ Law
I then noticed your email about price packages. I did experiment with this idea a few months back and I know it makes sense (based upon research)
The thing is as I really do like to put my all into every project I don’t want to lower my prices for some kind of basic package. I dont want to do that type of work.

I guess this leaves me only one option?.. to have a Higher priced services that really gives them the absolute VIP treatment..
I do like to go the extra mile in my work. If it needs something then I just want to do it without worrying about cost. So it seems I can only provide One service, which IS V.I.P.
would it still be productive to create more than one package to offer my clients?

thanks for the great videos

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Frederick

Great information and presentation. I like your style and sense of humor, the end of your video was a hoot.

I implemented two options on my site … An “affordable” service and an “advanced” higher price package. I do about 50/50 between the two.

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Alex Lobosky

I have not done any studies but based on my personal experience noticed that offering 3 options, good, better, the best, when each have only small increase in price, helps in closing the sale the best.

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Brian

Thanks Derek … this may work … or it may not.

One experimental outcome doesn’t mean a tactic will always work. “Best practices” don’t always produce best outcomes.
What worked for you may or may not work for me.
Is this one research study suggestive? Yes.
I prefer real live commerce split-tests to hypothetical shoppers. Real money, real results.
We have seen one choice landing pages outperform two-choice pages. And the reverse.
Great stuff, thanks Derek.

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Roz Fruchtman

I absolutely agree.

I was looking for a CD/DVD Recorder for my TV. I went to PC Richards and all they had was ONE choice. I left without anything.

Had they had a second one for me to choose from I might have bought it on the spot as I really wanted it and was ready to buy.

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Tracy

I’m curious if offering an instalment payment plan for an info product would work as a “second choice”, or if that doesn’t really count?

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