Simplify Your Pricing
Confused buyers don’t buy!?This is one of my favorite sayings.?Buyers are afraid to make a mistake, so when they’re uncertain, they are less likely to buy.??
Do you have a complex price list
Fifteen years ago, I bought a custom-fitted titanium bike from Seven.?Two friends owned the bike shop and I was excited to buy one from them.?When I went in for my fitting, of course, they watched me ride a stationary bike, made a bunch of adjustments, and had the perfect fit.?So far, what I expected.?Then they handed me a 7-page questionnaire to fill out on how I ride.?Do I corner hard??Do I accelerate quickly like a sprinter??Not only was I confused, but I was terrified that I was going to specify a bike that I hated.??
Yes, I still bought the bike.?But I almost backed out.?I didn’t want to make a mistake.?If it weren’t for my friends selling it, I probably would have backed out.?A confused buyer doesn’t buy.?This example wasn’t pricing, but it was about a buyer afraid to make a mistake.?
If you want to simplify your pricing while creating a product portfolio
First,?clearly determine your market segments
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Second,?within a market segment, create good, better, best versions
Now,?put yourself in the shoes of a buyer.?They first quickly and easily identify which market segment they are in.?Then, they see a good, better, best product offering.?Voila!
Of course, this doesn’t work for every company or product line, but I’ve seen it work many times.?The real problem most companies have is they don’t know how to define their market segments, and then they don’t know which features go in which version.?Let’s save that conversation for another time.?
What companies do you know of that use this product architecture??Let us all know.?
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Now, go make an impact!
owner, bicycle maker - Hubbub Bicycles
1 年What sort of goofus friends must you have, who dared to ask you relevant questions before, by sorcery, conjuring a made-to-order bike? In seriousness, your point is well made. It is precisely why we so rarely (perhaps a half-dozen times? over the past 25 years) ever used Seven's multi-page questionnaire. Most of those would have likely been to help prepare a customer beforehand, coming from long distance... Which may help to explain how you fell victim. The vast majority of the time our only "questionnaire" was a one-page detail sheet we privately filled out as we acquired answers through conversation. The idea, especially in recent years, is that this convesation should be as casual as possible, so the customer's experience is that of enjoyably discussing their history, habits, and wishes, not answering high-pressure questions. The two extremes of custom bike buyers: A.) Those who come prepared with pages of questions, lists, spreadsheets, and a Moleskin, afraid of not being involved every detail, and B.) Those who come in for 90 minutes of discussion, essentially saying, "This is who I am. Work your magic."
CEO Ibbaka Performance - Leader LinkedIn Design Thinking Group - Generative Pricing
1 年I wonder if we are not over indexing the GBB meme. This is often a good packaging and pricing design, but not always. Sometimes a looser bundling is easier on the buyer. Maybe we should have a conversation on when to use GBB?