What's Your Pricing Strategy?

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  • Every purchasing decision Bob makes discourages him.
  • The more purchasing decisions you give him, the likelier you'll drive him away.

For instance, let's say you're selling widgets to Bob.

Do you sell by the item or by the package?

Say you sell it by the package.

  • 3 widgets for $9. Ouch!

Now, let's say you sell it the item:

  • It's $3 for the first one. Ouch!
  • The second one is another $3. Ouch!
  • The third one is $3. Ouch!

Every ouch your customer subconsciously hears pulls Bob away from the incremental purchase.

  • Why does NetFlix price by the month instead of by the movie rental? You worry about one ouch point per month.
  • Why does McDonald's promote its deluxe meals? You worry about one ouch for the purchase.
  • Why does Verizon price its cell phone plans by the month? You worry about one ouch when that bill comes.
  • Why does Apple sell its computers online with predetermined add-ons? BAM. One ouch.

Here's another way to think of it.

Think of Sales

  1. 1 sale is tough.
  2. 3 sales are tougher.
  3. 5 sales? DANG SON

When you package you products, you worry about 1 sale; when you try upselling, you worry about 3/5/10/etc. sales.

Your chances of successfully selling every incremental item decreases every time. (It's in the study.)

Yes, you won't find a definitive answer to price your products (testing and experimenting constantly is the prime way to go about that); but, packaging your products by package could eternally change how you sell your items.

Package.

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Posted on October 18

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