Sales coach Ryan Dohrn explains why presenting three pricing options closes more deals. When BrainSwell Media reviewed 1,200 proposals, three-option packages closed at 56-65%, beating one or two options. Prospects naturally pick the middle tier, so structure it as your ideal offer while the low tier looks weak and the high tier tempts upgrades.
What's going on, friends and fans? Ryan Dohrn here, your friendly neighborhood sales coach, and we are answering your listener questions sent in to ryan@ryandohrn.com. Be sure to subscribe however you get your video tips. You don't want to miss any of them. All right, first question comes from Bonnie in Virginia. Hey, Bonnie from Virginia. Say, Ryan, you are sold— yes, I am— on 3 pricing options. Where does that come from? Any statistical evidence that you're right? So, um, Bonnie, I like to quote myself sometimes. A lot of times I'm the source of the information. Now, there's a lot of empirical data about 3 pricing options. Now, if you're a fan of mine or you've been following along in all the webinars that we do, there's a lot of power in the rule of 3s. So when you think about everything in nature that happens that really is worth a darn, it all happens in groupings of 3s. So it takes 3 things to start a fire. It takes 3 things to move a mountain, Goldilocks and the 3 Bears, 3 strikes and you're out, 3 trimesters to make a baby. I mean, almost everything worth a darn— H2O— almost anything worth a darn happens in groupings of 3s. So why is 3 pricing options so important to me, and why do my clients use that a lot? Well, typically I like to call it the Goldilocks principle. Oh, once again, Goldilocks and the 3 Bears, right? The Goldilocks principle is your porridge was too hot or the porridge was too cold or the porridge was just right. What I find is that most of the time when you give 3 pricing options, typically a prospect will gravitate towards that center option. So what you want to do is make sure if you're doing a pricing package or whatever, that that middle section is usually the one they would probably buy if you use FOMO and you use scarcity success stories to try to drive them towards that middle option. What typically happens, whether you're selling media, marketing solutions, software, or whatever, typically that middle option, sort of the good, better, best, that better kind of right in the middle is that sweet spot. So you really want to design that middle option to be what is most common within that category or within a certain group of clients. Then you want to make the lesser options, so like option 1 would be the least option, you want to make that seem pretty unattractive, but then the middle option is what they probably want, but then the bigger option, like the best option or the diamond option, whatever you want to call it, the platinum option, normally it's a little bit of a stretch for them, but normally it's about making a logical leap. Like if you spend another $500, you'll get this, and it just sounds like, wow, really, really good if you'll step up, or another $1,000 or another $5,000 or whatever your circumstance is for the sale. Now there's also some empirical data just in terms of odds of closing. So if you give somebody one pricing option, it's sort of like kind of a bit of a 50/50 chance, like a yes or a no. It's kind of a 50/50 thing. A lot of people feel like when you give people multiple options, it confuses them. I don't find that to be the case. I feel like when you give somebody multiple options, it makes them feel like they're choosing, but you're actually setting it up that they're going to buy that, potentially buy that middle option. Or maybe they're gonna upgrade a little bit to the next higher option. Alright, so one option is kinda like a 50/50. I feel like 2 options is no longer 50/50. I feel it's sort of like, I don't know, 25, 25, 25, 25. I feel like there's— now all of a sudden you're like, oh gosh, I don't know, I have to choose between these 2. Then when you give them 3 options, I feel like there's comfort kind of in the middle. Now the data that I have from my clients and from my closing activities is that if I give 3 pricing options, I find that I'm closing 50% or greater of the proposals that I'm presenting if I'm giving 3 pricing options. Now, we did have an opportunity here at BrainSwell Media to review about 1,200 pages of advertising sales proposals. What we found is of those that won business, far greater than 50%— 56%, 57%, as high as 65%— were closing more when they gave 3 pricing options as opposed to gave 2 pricing options or just 1 pricing option. The other thing you want to be careful of with 1 pricing option— see, a lot of you have been trained to ask somebody their budget. I don't train that way because their budget is not irrelevant, but they don't know what it takes to be successful for X amount of dollars. It's my job to guide them towards that. So in the media business where I live most often, it's my responsibility to guide them within a category as to what it's going to take to have marketing success within their category. Well, that, that spend level has been set by somebody else. I didn't set the spend level. So for example, this is just a basic example. If you're in the real estate business and you want to work with me in marketing, no problem. There's kind of a good, better, best, or I call it present, competitive, dominant stages of spending. If you want to be competitive, another realtor has already set the bar for what it takes to be competitive. Some realtors, realtors have set the bar for being dominant in the market. Some are dipping their toe in the water. So rather than asking somebody their budget, I'm guiding them towards that middle or competitive option. Now before you say, oh, and leave in the comments, oh Ryan, you're leaving money on the table, what I found is that if I guide people towards that middle option, I almost always get them to spend more. Because if I left them to their own devices, they would typically buy the lower option. Right? And so I really feel like that middle option, that sweet spot, is right there in the middle of that marketing rule of 3 or the pricing option rule of 3. I just try to build everything around 3s. 3 words in the subject line, 3 sentences max, 3 pricing options. I prospect every 3 business days on the same— it just makes it easier for me to kind of follow that rule of 3. As a matter of fact, maybe that's my next book, is The Power and the Rule of 3 in the Sales Business. How's that? So, all right, so Bonnie from Virginia, I know that's kind of a long explanation of what it is that you asked, but I truly feel like that's why I'm sold on it. And the other thing is, I mean, I sell every day, so I'm doing what works and I'm doing what makes me money. So keep your questions coming. Thank you, Bonnie, for that one. That's a good one. Keep your questions coming to ryan@ryandohrn.com. Friends, never forget, if sales was easy, everybody'd be doing it, and they're not. We're not crazy, friends. This is a great career. It's going to feed your family for a lifetime. All right. We'll see you next week.
