Ryan Dohrn explains why offering three pricing tiers works in sales. Research on 1,200 proposals found that deals with three options closed 56% more often. He suggests naming them Present, Competitive, and Dominant instead of good, better, best.
Hey, friends and fans, Ryan Dohrn here, your Global Sales Coach. We're answering your listener questions sent in to ryan@ryandohrn.com. I love these listener questions. All right, first one, Rob from Utah. Hey, Rob, how are you? Question, hey, Ryan, my boss is not a fan of the 3 pricing options. He hates, in all capital letters, hates good, better, best type of scenarios. What should I do? So, Rob, first, I always recommend you do what your boss says, okay? Just like I recommend you should do what your spouse says. Your partner says. Your partner says. All right, but the real big question is, why does he hate it? More than likely, most people that don't like 3 pricing options, they don't like the way that good, better, best sounds. I agree. Some people don't like the gold, silver, bronze. It's been kind of overused. So let's figure out a different way to present it. In most cases, the reason I like 3 pricing options is because of what we've learned through our research. We looked at 1,200 pages of sales proposals. What we realized is that over half, 56% to be exact, that had 3 pricing options always closed more than those that had either one option or more than 3 pricing options. Why does this typically work? It's the Goldilocks theory. So your porridge is too cold, that's the low option. Porridge is too hot, that's the third higher-priced option. Ooh, the porridge is just right, that's that middle option. Now you can classy it up. Is that a word? Make it more classy. So one of the things I like to do is, especially I sell a lot of advertising, is like a Present, competitive, dominant pricing scenario, you could do that as opposed to good, better, best, or gold, silver, bronze. But just think through the 3 pricing options scenario, try it out a few times and see if you can't win your boss over to it. But more than likely, they don't like it because the way it sounds— good, better, best. So depending upon your industry, you want to name it something that makes sense for your industry. Some people have fun with it, some people don't have fun with it. They just call it pricing option 1, 2, or 3. I would always side on the side of facts, and the facts are 3 pricing options almost always closes more business. So, Rob from Utah, thanks for your question. Keep your questions coming to ryan@ryandohrn.com, and over on the podcast, Mike Obert and I are answering these questions as well. All right, friends, if I can be of help, reach out to me. ryandohrn.com is the website. Never forget, if sales was easy, everybody'd be doing it, and they're not. We're not crazy. This is a career, friends, that'll feed your family for a lifetime. All right, we'll see you next week.
