As a woman leading a service-based business, you might often wonder, “How can I offer my services to different clients at different price points without compromising on value?” The truth is, it’s not about offering the same service (or product or software) at varying prices—instead, it’s about crafting distinct packaged and tiered offers that speak to the unique needs of your diverse audience.
In this episode of Live with The Pricing Lady, we dive into what you should consider before deciding if packaged and tiered pricing strategies are a good fit for your business. We’ll explore how these approaches can help you connect with different customer segments, add layers of value, and justify different pricing levels—all while avoiding the pitfalls of confusion, complexity, or diminishing your brand’s worth.
I’ll share with you some of the essential considerations—from market trends and customer expectations to financial implications and alignment with your business goals. Whether you’re looking to differentiate your offerings or streamline your pricing strategy, this episode will provide the insights you need to make informed decisions.
Join me as we uncover whether packaged or tiered offers are the right fit for your business, and how to implement them in a way that resonates with your clients and supports your growth.
What to Listen out for:
- 00:21 Benefits of Packaging Offers
- 05:24 Considerations for Implementing Packages
- 09:44 Differentiation and Complexity
- 12:43 Financial and Pricing Implications
- 17:25 Final Thoughts and Recap
Favorite quotes from this episode
“Packaged offers not only give your customers options that are easy to understand, they also provide an anchoring effect to your pricing.”
“Market trends are one consideration. In the context that it’s important to understand what your customers want right now.”
“The more flexible you are (with pricing) the more complexity you add to your offer.”
“f you have one offer now and you decide to put in a premium offer, what are you hoping to achieve with that? There should be a good business purpose behind it.”
Rate, Review and Follow the Show on Apple Podcasts
“I’ve just found my Pricing Resource!” … “A binge worthy podcast.” … “I learned so much about how to improve my profitability.”
If that sounds like you, please consider rating and reviewing the pricing podcast. It helps me spread the word to more people and ultimately get more small businesses on the path to sustainable profitability and business success. Click right here, tap to rate with five stars, then select “Write a Review.” Last let me know what you loved most about the episode!
If you don’t already, follow my pricing podcast. New episodes come out every couple of weeks, plus bonus episode. If you’re not following there’s a good chance you’ll miss something. And last listen to more episodes there are more than 130 episodes to choose from from setting prices to executing them to changing them you’ll find answers to many of your pricing questions.
Reach Out, Connect and Book a Call with Janene
Linkedin | YouTube | Facebook | Email List
Get started improving your business. Beyond this pricing podcast there’s more for you to explore. Sometimes it’s difficult to know where to begin. I suggest you Download the the self assessment Pricing Scorecard to get a view of what’s working and not in your business. Also if you’ve ever wondered “What’s a fair price?” then check out my on-demand webinar “Getting to A Fair Price“. Two great places to get started with pricing in your business today.
Get in touch with Janene, your Business Strategist & Pricing Expert. If you’ve got a business question that needs answering, a pricing challenge you’re facing or you have suggestions for future topics or guests, let me know. Your questions and insights often become episodes. Share yours with me and let’s see where it goes. Contact Janene.
Transform your business and life. My mission is to help you build a more sustainably profitable business. One where you can confidently charge for the value you deliver. Curious about my coaching and consulting offers, check them out. Let’s see how we can work together. Book a complimentary Call today!
Episode Summary
In this episode of Live with The Pricing Lady, we’re diving deep into the strategy behind using packaged and tiered offers for different customer segments. Whether you’re in the service industry, running a Software as a Service (SaaS) company, or have a product-based business, understanding the advantages and considerations of these pricing structures can significantly impact your bottom line. Remember when we focus on finding the best prices we first need clarity on who (the customer) and what (the offer). How you slice and dice your offers up can greatly influence the perceived value.
The Versatility of Packaged and Tiered Offers
Packaging isn’t just for services; it’s a common strategy in product-based businesses and SaaS industries as well. For instance, in SaaS, packages often bundle different functionalities. A membership site might offer an “Essential” membership as a basic tier and a “Premium” membership with additional features. This tiered approach helps you meet the diverse needs of your customer base.
Pricing Flexibility
One of the key benefits of offering packaged or tiered pricing is the flexibility it affords. When done correctly, packaging can serve various customer groups, be it in product-based businesses, services, or SaaS industries. It’s a way to streamline how you work with different customers and increase efficiency.
Anchoring Prices
Another fascinating aspect of packaged and tiered offers is how it can aid in anchoring prices. This psychological pricing technique makes a $5,000 offer seem less expensive when compared to a $15,000 option. The customer perceives the smaller number as more affordable, even if both prices are high in absolute terms.
Moving Away From Time-Based Pricing
For service-based businesses, packaged pricing can also help shift away from time-based pricing. Billing by the hour isn’t always efficient and doesn’t necessarily reflect the value delivered to the client. By focusing on packages, you can align pricing more closely with the value offered, regardless of how much time it takes to deliver the service.
Things to Consider Before Shifting to Packages or Tiers
- Customer Needs: Understand your customer’s needs. Are there different budget levels or required levels of value? If your customers don’t see any added value in the tiered offerings, it might not be the right strategy.
- Market Trends: Keep an eye on market trends but don’t blindly follow them. While they can give you insights, what works for another business might not work for you.
- Differentiation: Ensure there’s clear differentiation between your packages. If customers can’t perceive the value difference, then the tiers won’t be as effective.
- Complexity: Avoid making your offerings too complex. Ideally, stick to three tiers, as this is easier for customers to understand and for you to manage.
- Financial Side: Evaluate the financial implications. What do you hope to achieve? What are the expected costs and potential revenues? Make sure the math adds up.
- Fit with Current Pricing: Ensure the new tiers fit seamlessly with your current pricing structure. You might even use one of the new packages as an alternative option when pricing objections arise.
- Customer Impact: Consider how the new packages might impact your existing customers. Will there be any negative feedback?
- Ease of Implementation: How easy is it to implement these packages? Sometimes starting simple can help you test the waters before going all in.
- Alignment with Business Goals: Ensure the new packages align with your overall business goals. If your goal is to work with a specific demographic, your packages should reflect that.
- Adding Value: Every new tier should add value for both you and your customers. If not, reconsider your approach.
Final Thoughts
To summarize, shifting to packaged or tiered offer and pricing has many strategic benefits but requires careful consideration and planning. Reflect on your business goals, customer needs, and the financial implications before making a shift.
Questions for Reflection
- What concerns do you have about implementing packages or tiers?
- What do you want to achieve with this new pricing strategy?
Mastering pricing strategies doesn’t have to be daunting
Deciding whether to implement packaged or tiered offers is a pivotal step toward maximizing your business’s potential. By carefully evaluating your customer needs, market trends, and the financial impact of these pricing structures, you can unlock new opportunities for growth and efficiency.
Understanding the versatility of packaging and the benefits of pricing flexibility allows you to meet diverse customer demands while anchoring value effectively. Whether you’re in the service industry, running a SaaS company, or managing a product-based business, aligning your pricing with the value you deliver and ensuring simplicity in your offerings can elevate your business to new heights.
Listen to this episode of ‘Live with The Pricing Lady’ as we discuss the merits of packaged and tiered offers for your business.
