The psychology of pricing your advisory packages online
Experiments run by behavioural economists reveal interesting findings regarding consumer decision making. You may already be aware of them, but do you apply them to your own business?
I’m talking in particular about the inclusion of “dummy” options when presenting a suite of packaged services for clients to choose from.
The theory (proven true by experiment) is that by including one or more deliberately unattractive options amongst your regular packages, you can influence which of the more genuine packages people will opt for.
You can do this to help demonstrate the value you are offering to clients and steer them towards the advisory package you most want to provide.
Why package your services in the first place?
Packages simplify the buying process. In business, we probably all experience this most commonly when signing up with SaaS vendors, like Xero for example.
There will be a choice that is a little too basic for most people, but cheap. Something with all the bells and whistles, but too expensive. And something that does pretty much what you want and priced in the middle. It makes for a quick decision.
This is good. The buyer has acted. They probably feel pleased about their choice. And they have actually gone for the package the vendor wanted to supply.
It’s the package that delivers the value and solves the problem that customers have. They just need this highlighted clearly to them by showing them what they don’t need.
I’m sure you recognise this technique and the power it has. So let’s now think about the structure of advisory packages you could be providing.
You can ease the buying process of your advisory service packages by showing your ideal offering against one or two that don’t provide the same value to most clients.
Packaging advisory services save the client the time and effort of having to pick and mix themselves.
People naturally ask “Compared to what?” when making a decision. By presenting them in tiers, it helps them to understand the value by seeing one package alongside the next.
Tips for creating conversion focused packages for your website
It is worth looking at how other businesses present their packages for ideas. As I said, SaaS providers are a good place to look – accountancy software packages, email marketing providers…
Menus and wine lists can also make for an interesting read.
Restaurants know that many people default to the second cheapest bottle of red when choosing wine because they don’t want to be seen drinking the cheapest, but don’t have the knowledge to buy something more expensive.
Here are some tips for creating packages that will convert
Build the packages around solving your ideal clients’ problems – You don’t want to be packaging up services which you are uncomfortable providing, so make sure they target high value work to you. But equally, make sure the packages resonate and are useful to clients.
Don’t offer too many packages – In his fascinating TED Talk: The paradox of choice, Barry Schwartz explains how being presented with too many options causes paralysis.
Make the packages easy to understand – Avoid jargon and keep your language simple. Include a logic to the suite of packages so that they can be easily compared, based on both what they offer and price. Remember the purpose of the packages is to ease the buying process.
Apply the psychology of pricing – Make the middle package your stand-out offering that clearly provides the most value. It’s okay to overprice the top option if you are not expecting people to use it. It’s there to show people how great the middle option is.
Find out more
We’ve run a series of webinars on building up your advisory offering. You can watch them over on our webinars page.
Or if you want to discuss how we can help you develop this part of your business, please get in touch on [email protected] or call us on 0117 915 0420
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