How to set up a Tiered Pricing Plans
Setting up a Tiered Pricing Plans is a good strategy to boost conversation rates. All companies use it because it really works great. This is the today’s first tip: you should always follow examples that have been proven to be effective. In this article, I’m going to reveal you how to set up a tiered pricing plans for your product or services.
First of all, we should see together what is a tiered pricing plan. I want to be synthetic and clear as always: this strategy simply refers to various price points that you can apply to every product or services. You just have to look around you to notice that this pricing structure is widespread in every kind of business: mobile phone service plans, internet service, software, even cars.
The final purpose is to give to your costumer different option that they can choose while purchasing. They can choose a base product as a trial plan or a premium package that includes additional features.
There is a reason why tiered pricing plans are so effective: the psychology behind the process. To offer a cheaper or a more expansive option is the best way to seduce and attract them. In fact, if you give three or four options, most part of your customer will choose the one that seems to offer the best value. Usually they do not consider the cheaper one because it appears improper to meet their needs. At the same time, they avoid the expansive price because they think that they do not need so many features.
Tip 1. Tiered Pricing for services
Do not worry, setting up a tired pricing for a service or membership it’s actually really easy. Start setting your baseline, the option that you want your customer to choose. Then set a minimum and maximum service or membership. For the first one remove some features or additional services from the offer. For the second one, add exclusive features. If your service cannot be edited, then try to come up with temporary trial demos or to add inexpensive product or services that your already have created as eBook, or other premium content.
Make these three options available for your costumers, you will soon see an increase in your conversion rates. The cool aspect is that most of them will choose the baseline service. At the same time, you will also sell the premium package, that means big money for you.
Tip 2. Tiered Pricing for physical products
Things can change a little if you are selling products. You do not want to add items or features that will increase the production’s cost, so you have to be creative and look for digital product or services that can add value to the product. For example, if you are selling a weight loss supplement, you could add a cookbook or a guide. You can use this strategy for every kind of physical product, you just have to remember that is really important to add something that does not represent a cost for you.
I love to create tiered pricing plans because it a creative process that can really boost sales and increase conversion rates. The best way to find out your perfect strategy is to analyze your tiered pricing results to understand your customer preferences and their way of consume.
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