As a tradesperson, you likely drive a lot. Over the course of a day, that mileage can really add up. With gas prices reaching record highs across the country, you…
Customers don’t always understand the value of products and services. As a result, they have trouble determining whether or not it’s worth paying that amount of money. Implementing a good better best pricing strategy can help new and existing customers better visualize these differences between price points and present new opportunities for upselling and cross-selling.
So, instead of competing with other contractors by trying to undercut their prices in order to get clients, you can set your prices high and differentiate yourself by emphasizing the value of your services. This will allow you to charge more money per sale and still make a profit.
Also known as ‘tiered pricing,’ the good better best pricing strategy generally offers customers three options for a product at gradually increasing prices: the ‘good’ option, the ‘better’ option, and the ‘best’ option.
Good pricing is usually the lowest possible price that still allows the company to make a profit and attract price sensitive customers.
Better pricing is usually something that offers something extra, like a higher quality, a better guarantee, or a better customer service rating.
Best pricing is something that offers a unique value, something that no other company offers.
Good better best pricing allows you to charge more than one price point without alienating any potential customers who might not be able or willing to spend more money on your product or service for different features or benefits. It also allows you to have a wide range of options for your customers who might want to buy in at a lower price point but can afford to spend more.
It’s also a good way to find out what your customers want and how much they are willing to pay for it. If you find that the majority of customers are more interested in the best pricing, then you can adjust your pricing accordingly, and focus on improving your best products. If you find that most of your customers prefer the better pricing, then you can focus on improving those products and services as well.
You should be careful when using this strategy though, as it can be difficult to implement if you aren’t familiar with how it works or what the different options are. You need to make sure that the product or service you’re offering is actually different enough from one option to another that people will want to upgrade. If you don’t, then your customers will likely feel like they’re paying more for nothing, which can lead them to look elsewhere for their products and services.
There are a few things to watch out for when using this pricing strategy. First of all, if your product isn’t high quality even in its basic form, then budget conscious customers will not feel like upgrading is worth it because they won’t be getting anything better than what they already have if they do upgrade. Secondly, if your customers don’t understand how much better one option is over another, then you run the risk of losing customers who don’t think that the price difference is worth it.
If you’re not sure how to decide which option is better than another, then it’s a good idea to let your customers make that decision for you. You can do this by giving them a survey asking them which option they would prefer and why. Then you can use that information to guide your future product development and marketing strategies.
The best way to make sure that customers are satisfied with their purchase is by providing excellent customer service after the sale. This means making sure that any problems are taken care of quickly, without any hassle on the part of the customer. It also means making sure that your products live up to their reputation as well as their marketing materials say they do. Good customer service will also ensure that customers know what they’re getting when they buy from you and help prevent any confusion or disappointment after purchasing.
Whether you’ve noticed it or not, the good better best pricing strategy is everywhere you look. Any time you go to a restaurant or a movie theater and they offer you small, medium, and large options, that’s good-better-best pricing. When you book a flight and choose between coach, premium economy, and business class: there’s good-better-best again. Every time you fill your car up with gas, ‘good,’ ‘better,’ and ‘best’ are represented by regular, plus, and premium options. With the prevalence of this pricing strategy, it stands to reason that this is an effective practice
There are a lot of different ways to use good better best pricing, and the examples are pretty much endless. Here are just a few examples of how this pricing strategy can work for a service business to attract more and better sales:
A plumber could offer basic services like fixing leaks, cleaning out pipes, and other general tasks that can be done without needing to replace anything as their good pricing. Then, they could offer to replace needed equipment as their better pricing. Then, for best pricing, they might offer premium products or special upgrades like warranties for people who want to upgrade their plumbing system or want the best possible equipment installed in their homes. That way, they don’t have to worry about the systems breaking down again at inconvenient times.
HVAC Maintenance Agreements
A heating and air conditioning business, meanwhile, might offer HVAC maintenance contracts at three different prices. At the lower end, the company may offer two yearly, minimal annual inspections and a 5% discount. The ‘good’ package might offer additional benefits like a 10% discount and priority service. And the premium package, meanwhile, could offer a significant discount of 15%, remove the fee for after hours service, or offer more or more robust inspections.
In order for this strategy to work, it’s important that customers can easily identify the differences between each option. Depending on how much your product or service costs and how complex it is, you might have multiple pricing tiers with variations within each tier.
The key here is that your customers understand what they’re paying for when they choose from a good-better-best menu of options.
For example: if you have three different types of air conditioning units available for purchase, but only two are listed on your website as options, then you won’t be able to make use of this pricing strategy effectively. Likewise, if your product or service has many different variations and one of them is significantly more expensive than the other two options but doesn’t offer any additional benefits (or even a downgrade), then this pricing strategy won’t be appropriate either.
But in reality, this strategy is actually quite simple – if you know how to do it well. If your business has a clear understanding of your target market and the type of customers you want to attract, then you have a great base from which to create your pricing strategy. Once you have this knowledge, putting together solid incremental value for your price bracketing is much easier than you might think.
Here are some ways to get started:
The first step in creating any type of good better best pricing strategy is to know your audience inside and out. You need to find out what your customers’ needs are and determine whether or not you can meet them with your products. If you can, then you should offer those products at a higher price to appeal to the customers who want something that’s better than what everyone else has.
To do this, you must first break down your customer base into groups – this is your ideal audience. With a clearer idea of who your ideal audience is, you can then start customer research looking at trends and patterns in their buying behaviors.
These insights will help you to create a more tailored and effective tiered pricing to attract customers, which will result in greater sales at higher prices and a larger customer base.
Good pricing is a lower priced offering for those who are just starting out in their career and looking for something inexpensive, but still high quality.
Better pricing could be for those who are willing to pay a little extra for a product or service that is of higher quality and has better customer service but still want an affordable option.
Best pricing could be for those who want the highest quality product available with the best customer service possible, at an expensive price point.
FieldPulse’s field service app offers tiered pricing options for side-by-side product comparisons. This is a great way to help customers visualize pricing and see potential features.
With the FieldPulse Good, Better, Better feature, technicians can give your customers a side-by-side comparison of three products or price levels on the spot. Using this feature, your customers can easily compare differences, benefits, and features of higher-priced alternatives while comparing lower-priced alternatives. This gives your clients more information and flexibility about their pricing options to build trust.
With our pricebook, you can provide your customers with an overview of the services you provide, including prices and descriptions of procedures. Each product is presented in a simple, easy-to-understand way so you don’t overwhelm customers.
The FieldPulse app will also track and calculate commissions on estimates or invoices automatically once a choice has been made.
Next, you need to set clear goals for your pricing strategy. At this point, you should have a good idea of the type of customers you want to attract and the type of products you want to sell. Now you need to put those two things together and decide what outcome you want your strategy to have. This can be anything from increasing your average sales price, to increasing your average number of sales per day, to increasing average customer lifetime value. What you want from your pricing strategy is up to you – but whatever you decide, make sure it’s clear in your mind. This will help you to keep focused and on track throughout the process.
As you’re putting together a good better best pricing strategy, you need to identify your costs. This is an important part of the process because it will help you to understand where your profit potential lies.
These costs come in many forms, from the cost of doing business, to the cost of sourcing your products, to the cost of logistics. Understanding all these costs will allow you to make more informed decisions when it comes to pricing your products. At this point, it’s important to note that you won’t be able to include every cost – you’re just looking to identify the top ones.
Next, you should create a solid benchmark to help you decide your pricing strategy. For this, you have two options: You can either look at your competitors’ strategies and decide where you want to position yourself in the market, or you can decide how much you want to make on each product. At the end of the day, it doesn’t really matter which one you choose – as long as you’re consistent throughout the whole process.
When assessing your competitors’ pricing strategies, try to avoid simply looking at the price of their products. Instead, try to look at the reasons behind why they’re selling their products at that price, and how they’re marketing them. This will give you a better idea of how to position yourself in the market.
Next, you should estimate the consumer perception of your products. This means taking a look at the quality and value of your products, as well as the price point of your competitors. By assessing these things, you’ll be able to better understand how much you can charge for your products. This is an important part of the process because it can have a huge impact on your pricing strategy. By making just one incorrect assumption, you could end up losing a lot of potential profit – or even lose potential customers altogether.
There are generally two approaches to creating a tiered pricing service packages for your business:
A “Pay What You Want” pricing strategy involves offering customers an option between paying more money or getting less value for their money at different price points. This could be an option that helps increase sales while also helping build up your reputation as being someone who offers high-quality products and services at affordable prices at the same time.
Another way that you can use tiered pricing structure is by bundling your products or services together into one package and charging a flat rate for them. You’ll offer customers the option to pay more money if they want to get a higher-quality version. If they decide not to do so, they will receive the lower-priced version instead. Bundling them together into one flat rate makes it easier and cheaper for customers to get everything they need in one fell swoop.
This pricing strategy is also used by many service providers and companies that offer a variety of different products or services. You can bundle these together into one package at a flat rate and offer it as an alternative to purchasing them all individually. This may be more expensive, but it’s also going to appeal to customers who don’t want to have to pay for everything separately and don’t want to waste time trying to figure out how much each individual product or service will cost them.
Finally, you need to determine the best price brackets for your individual products. This is the final stage of putting together a solid good better best pricing strategy, and it’s by far the most important. If you get this part wrong, everything else is irrelevant.
After doing all of this research, you should have a good idea of how much your competitors are charging for their products and service. But what about your own? How should you price them?
Well, there’s no one-size-fits-all answer to that question. Your price bracketing all depends on your target market and the value that you’re offering.
When determining a good price for your products and services, it’s important to do so with consumer perception in mind.
For example, one product might be priced higher because it’s a luxury item and the customer is willing to pay more for a quality product. Another product might be priced lower because it’s a basic necessity and the customer is more price conscious.
You’ll need to take all of these things into consideration when pricing work and products. Ultimately, you want to charge enough that you can make a profit while still being competitive in your market.
Depending on your good better best pricing strategy, you may want to focus on maximizing profit, or maximizing sales volume. If you want to maximize profit, then you need to find the sweet spot between what your suppliers are charging you, and what your customers are willing to pay. If you want to maximize sales volume, then you need to find the right price that will appeal to your customers, but also result in the most sales possible.
By following the tips in this article for implementing a new pricing structure, you’ll be able to follow the lead of thousands of other successful companies to create an effective pricing plan that drives sales and profits and attracts new customers.
FieldPulse was created to help trade businesses achieve rapid growth through automating their operations and maximizing efficiency. With powerful integrations and features thoughtfully designed to support every trade, our unified software simplifies the daily work allowing field service owners to run their businesses whether they’re at the office or in the field. Book a demo for a free, customized tour of our platform, or utilize our free 7 day trial to try out FieldPulse at your own pace.