Setting Prices? Try Different Tiers

Learn one way of setting prices for your service-based business.

Setting your prices too low or too high is one of the greatest fears of entrepreneurs.

This is a fear you will need to confront and resolve if you plan to build a business which can sustain your life and future goals.

In the meantime, consider offering three tiers. Examples Below.

A basic price - $24.99 with which the client only gets the core problem solved but with a limitation - e.g. only single user/account.
The small business option - which is the one you usually see on websites as (best value) at $49.99 will give a little more than the basic but enough to solve their primary problem. - e.g. Up to 3 users/accounts.
The enterprise plan at $99.99 solves the problem fully (20 accounts) and adds additional value such as analytics dashboard, 24-hr support, etc.

Creating tiered pricing helps your customers choose what is best for where they are currently in their business. It also helps you collect data on whether your solution is correctly aligned with the price you've set.

Price = Your time to create and deliver the solution (also includes research, marketing, sales, admin, etc.) + cost of production (internet, fuel, materials, rent, etc.) + profit + taxes + perceived value + distribution costs + market analysis.

Pricing can also include seasonal demand such as with travel and psychological pricing such as $9.99 vs $10.

Categories: : business, Entrepreneurship, marketing, pricing