Ryan Dohrn explains why presenting three pricing options closes deals better than one or five. His analysis of 1,200 proposals shows three-option pricing closes over 50% higher. Structure them as low, middle, and premium tiers, positioning the middle option as most attractive.
Hey friends and fans, Ryan Dohrn here. We're talking sales and marketing strategy, and today we're focusing in on the rule of 3 and 3 pricing options that I'd love for you to consider as you're presenting your product, your service, your media offering, whatever it is that you're out there selling today. Now what's interesting is I've got a lot of friends and fans like me that are in the media sales business, and I tell people all the time, hey, if you can sell an advertisement, okay, you can basically sell anything, right? So what have we learned in this process and how does it translate to other sales businesses, but more importantly to ours, ourselves? What I've learned is that when you present 3 pricing options, most of the time the client's going to gravitate towards that middle option. Now, what's interesting is, and I want you to follow me on this, if we present, and I'm going to keep it simple so everybody understands, if you present a price point of one price point of $100, just as an example, if they say in their mind, oh, that's too expensive, you're out. If they say in their mind, that's not quite expensive enough, something seems a little off here, then you're not gonna get the sale. If it seems way too low, then you're not gonna get the sale. So you've got to ask yourself, when I present one pricing option, what happens in the psychology of the mind of the buyer? What we've learned over the course of the last 30-some years that I've been doing this, but more specifically as I was writing my book Selling Forward, Which, by the way, donating all the proceeds from that book to the Golden Harvest Food Bank. So do me a favor, wink wink, buy that over on Amazon or Barnes& Noble or whatever. What we found in our research— thanks for letting me do the little promo— what we found in our research was that when we presented 3 pricing options, we were following what's called the Goldilocks principle. So if you remember Goldilocks and the 3 Bears, 3 pricing options, that the porridge was too hot, The porridge was too cold. The porridge was just right. So here's what I do in advance of a meeting. Because I know that over 50%, well over 50% of my proposals that my teams present with 3 pricing options close more deals, I look at that client and I say, okay, where probably will they land? So if the base pricing option, again, just using $100 as an example, Because it's easy. If we know they're probably a $100 customer, well, then I want to give a pricing option that's more like $50 to $75, the second pricing option to be more like the $100, and then the next pricing option is going to be, say, like $150 to $175. Now, what I want to do is think about making the bottom option not look exactly the most attractive. Make the middle option look pretty darn good, and then make the the top option, the most expensive, seem not unattainable, but someone would kind of have to really stretch if they were going to do it. Psychology works like this: when I present a hundred dollar pricing option, it's sort of a yes or no scenario. When I present a seventy five, hundred, and one seventy five, the brain goes, huh? That lower one, I guess it would probably work, but it just seems, I don't know, a little too cheap. The $175 is probably a little bit out of my price range. I might be able to do it, but boy, that $100 kind of makes— it makes sense. What you've done, friends, is you've used statistics, you've used math, you've used all the things that make me crazy, you know, math and stats. What you've done is you've used basic human psychology to drive that buyer to the middle option. Now a lot of times people will say, well, Ryan, I wanna drive them to the top option. Well, you can in your presentation. So what you wanna do is you wanna make that top option— you wanna make sure you weave in success stories, talk about how successful people have been buying that $175 option, make it seem sort of like a marquee kind of thing. But you know what? It's okay if you can't do that because this middle option still is really potentially gonna work for you. Here's the thing I'd love for you to consider. When you give 3 pricing options, it really guides somebody's brain. When you give 1 option, it's sort of like, ah, yes or no, it's kind of a 50/50 kind of chance. When you give 5 options, then it stymies people. They're like, oh my gosh, I don't even know where to look or what to do with all these. 3 seems to be the, the perfect option, number of options to get people to really buy that middle option and secure it a lot more times. What's interesting, friends, is we had an opportunity to look at over 1,200 business proposals. Salespeople just like you and me sending out. Well, over 50% of the proposals that contained 3 options almost always closed better. They almost always closed more business. That's why I believe that you should not only go to a meeting prepared with your 3 pricing options, but you should almost always use 3 pricing options in almost everything you do. Whether you're selling tickets, whether you're selling software, whether you're selling media, always be thinking about what can I do to present 3 options to get somebody to really feel good about that middle option and get a deal signed. Friends, I love this job. I love to strategize with you. I love to teach. I love to train. I love to motivate. I'd love to come to your national sales meeting. and just get your folks really pumped up for success. Please do me a favor, reach out to me about that over at ryandohrn.com. Hey, stick around, stay close, more great sales training videos. I think they're great, and you say they're pretty good, coming up next. We'll see you soon.
