One common complaint I hear from business owners is that today’s prospect starts every call by asking about the price. Today’s consumer has already been price shopping online before they ever call anyone. Even worse, they come in to your business, touch and feel the product to determine that it is what they want, and then go online to buy it at a lower price from a company that doesn’t have the cost of operating a brick and mortar store.
Using a “good, better, best” strategy is one way to combat this. Have a “good” product that matches the lowest price your competitors offer locally or online, so you are bringing business in the door. Then up-sell customers to a “better” and maybe a “best” product.
The key to this strategy is having a well-trained sales staff to explain the benefits of the “better” and “best” products in a way that shows customers why the “good” product, while being an adequate solution to their problem, isn’t the ideal solution for them.
The goal is to gain a customer, even if that means making a very small profit (or even taking a small loss) while working hard to up-sell to products where you make a very good profit.
Although many successful stores use only these three price points in a classification—good, better, and best—you may elect to use four or even all five of the following in some situations.
- Your opening price point might be $29. This would be a specific, low-end product that you buy to match the lowest price in your area.
- Your good price point might be $59. This would be an entry-level product offering decent features and quality for a good price.
- Your better price point might be $79. This would be a slightly better product offering a few more features and better quality for a somewhat higher price.
- Your best price point might be $99. This would be a noticeably better product offering significantly more features and higher quality for a significantly higher price.
- Your top-of-the-line price point might be $199. This would be a specific product that you buy to offer your customers the biggest, the fastest, or the best. Statistically, five percent of customers in any market will want the very best available. Give them the opportunity to buy the best from you!