Copy my favorite pricing model

There is a tried and true method to structuring products that might help you if you are stuck. 

It works for virtually any type of product or service that you could offer. 

But, that’s not the best part. 

What’s so great about this model is that it can capture the entire stack of customers across your target market. Meaning, customers who are looking for low-cost options and customers that are willing to pay a premium. 

Another benefit is that this structure also works well for moving customers through your sales funnel. Whether they enter at the top-of-the-funnel (ToF), the middle (MoF), or bottom (BoF). 

It not only defines what you are selling, it helps you structure your pricing.

The Good-Better-Best Pricing Model

You have seen this structure before for things such as Netflix subscriptions or car washes or, in the example below, oil changes. 

We call it Good - Better - Best.

The purpose of a good, better, best pricing structure is to cater to a wider range of customers and maximize revenue at the same time. 

Some of the key benefits are:

• Catering to Different Needs and Budgets: This structure acknowledges that customers have varying needs, preferences, and financial constraints. By offering three distinct tiers, you can provide options that appeal to budget-conscious buyers (good), those seeking a balance of value and price (better), and those who prioritize premium features and quality, regardless of cost (best).
• Wider Market Reach: It allows you to attract a broader customer base that might be missed with a single or dual pricing strategy. Each tier acts as an entry point for different customer segments.
• Creating a Sense of Inclusivity: Offering options at different price points makes potential customers feel that there's something suitable for them, regardless of their budget.
• Upselling and Cross-selling Opportunities: The "better" and "best" options encourage customers to consider higher-priced tiers with more features or benefits, leading to increased average order value.
• Higher Profit Margins on Premium Tiers: The "best" tier often includes features or services with higher perceived value, allowing for greater profit margins. Sales in this tier significantly contribute to overall profitability.
• Leverages the Compromise Effect (Goldilocks Principle): When presented with three options, customers often gravitate towards the middle ("better") option. This tier is often designed to be the most attractive in terms of value for money, leading to a higher volume of sales at a profitable price point.
• Simplifying the Buying Decision: Ever felt overwhelmed with options when buying something? Offering three clear choices can simplify the decision-making process for customers compared to having numerous options. This can lead to faster purchase decisions.
• Softer Selling Tactic: Instead of aggressively pushing a single high-priced products, this structure empowers customers to choose the option that best fits their needs, making the sales process feel less forceful.
• Anchoring Effect: The presence of a higher-priced "best" option can make the "better" option seem more reasonably priced and attractive in comparison.

Good-Better-Best’s cousin

I almost exclusively use this model in my business. The only difference is that I break these options up across business models and then, also, within each business.

With those changes, I don’t think of it as Good-Better-Best. 

I think of it as DIY - DWY - DFY.

DIY = Do It Yourself

DWY = Done With Yo

DFY = Done For You

Following that structure, my business offers customers lower-cost options for using my products to do something for themselves. For example:

• DIY/Good/$: If they want to read a guide and manage their own product validation exercises, there’s my GTM Validation Guide. 
• DWY/Better/$$: If they want to hire me to consult on their GTM strategies there’s my GTM agency, Limitless GTM. 
• DFY/Best/$$$$: If they just want their GTM strategies both designed and executed with as little involvement as possible on their end, then they have to hire me on as a full-time agency.

At each step I’m less involved in the actual work, therefore, the cost to the customer is lower. As my involvement becomes more hands-on, the cost goes up and by a magnitude.

Implementing these models

Either of these models, Good-Better-Best or DIY-DWY-DFY, can be used in your business today. 

The key is structuring them intelligently. 

Make sure that you:

• Limit the options. I would stick with 2-3 tops.
• Each option should have a clear value to cost ratio.
• Target your middle option as your default. 
• Try to avoid discounts.

With the right structure in place you can a) attract a wider base of customers; b) maximize your profits; c) allow your business to scale.

A lot of the founders I talk to struggle when it's time to attract customers. 

If you are tired of your product launches failing, imagine how it would feel to have a seasoned professional work alongside you for an incredibly low price.