When it comes to pricing, three is the magic number.
Why? It’s all about perception and decision-making.
With only two options, people naturally lean towards the cheaper one. They see it as getting the most value for their money.
Present them with four or more options? Suddenly, it’s an information overload. Too many choices can lead to indecision, adding unnecessary friction to the buying process.
But with three options, something interesting happens. The middle tier becomes the safe choice. It’s not the cheapest, so it feels like a step up in value. But it’s also not the most expensive, so it doesn’t feel like maxing out their expenses.
Three-tier pricing creates a comfort zone for customers – a balance between cost and value. It guides them towards making a decision they feel good about.
Of course, every market and customer base is unique, so it’s crucial to test and iterate. But in my experience, three-tier pricing has often hit the sweet spot.
Any other pricing tips you’ve found through your experience?