Simplify Pricing

By August 21, 2008blog


I’ve had three conversations in the past week with companies about simplifying their pricing structures and how they communicate them. Most companies think that more pricing options are better for the buyer because of the flexibility to tailor to different needs. I’ve found more options confuses buyers, delays their decisions, and requires expensive salespeople to make the translation.

With RegOnline we went from a confusing ala-carte pricing structure to a “get everything” for $3.00/reg. We then watched the simplicity of the pricing resonate deeply with prospects who were previously confused by the pricing in our industry. Did that work for all of our prospects? No, but it was perfect for 80% of our prospects.

Here’s a great consumer example of making it easy. I just ate at this pizza place in Telluride that has an all-you-can-eat lunch special: $10/person for pizza and salad bar and a drink. There’s something REALLY nice about the simplicity of one price for everything. AND they even included the tax in the $10 too! I asked the manager how this deal was doing for them. He said “GREAT, people LOVE it!! We’ve seen our business grow dramatically since we started it.”

My recommendation is to reduce the number of line items in your pricing chart and watch your business grow.

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