Basic ($2,000), Standard ($3,500), and Premium ($5,000). Most customers chose Basic, and he struggled to sell higher-value services.
Then he changed his pricing structure without changing any prices. Same services, same costs, different presentation. Suddenly, 60% of customers chose the middle option, and his average sale increased by $1,200.
What changed? Tom learned that how you present your prices is just as important as what you charge.
The Decoy Effect
Tom's original mistake was making his cheapest option look like the best value. When customers saw Basic ($2,000), Standard ($3,500), and Premium ($5,000), Basic seemed like the smart, economical choice.
Tom's new structure: Essential ($3,500), Complete ($5,000), and Ultimate ($7,500). He positioned Essential as the baseline service, Complete as the popular choice, and Ultimate as the comprehensive solution.
Customers stopped seeing $3,500 as expensive - they saw it as the reasonable middle ground.
Anchoring Your Prices
The first price customers see sets their expectations for everything else. This is called anchoring.
Poor anchoring: "Our basic service starts at $500"
Strong anchoring: "Our comprehensive service is $2,000, but we also offer a streamlined option for $500"
By leading with your higher-priced option, you make your other services seem more reasonable by comparison.
The Power of Three
Three options work better than two or four. Here's why:
Two options: Customers focus on differences and often choose the cheaper one
Three options: The middle option becomes the "Goldilocks choice" - not too much, not too little, just right
Four or more options: Decision paralysis sets in
Most customers will choose the middle option when presented with three well-structured choices.
Bundling for Value Perception
Instead of pricing individual services, bundle them into packages that solve complete problems.
Instead of:
- Logo design: $500
- Business cards: $200
- Letterhead: $150
- Website: $2,000
- Total: $2,850
Try:
- Complete Brand Package: $2,500 (includes logo, business cards, letterhead, and website)
- Savings: $350
The bundle feels like better value, even though you've reduced your total price.
The Psychology of Payment Terms
How customers pay affects how they perceive value:
$1,200 annually feels like a big expense
$100 monthly feels manageable
$25 weekly feels almost insignificant
Break larger payments into smaller, more frequent ones when possible.
Removing Price Resistance
The way you talk about pricing affects how customers receive it.
Instead of: "It costs $5,000"
Try: "The investment is $5,000"
Instead of: "The price is $200 per month"
Try: "It's $200 per month to handle all your bookkeeping"
Instead of: "That will be $2,500"
Try: "To get your website launched and generating leads, the investment is $2,500"
Connect the price to the outcome, not just the service.
The Confidence Factor
How confident you sound when discussing prices affects how customers respond.
Weak: "Well, I guess it would probably be around $3,000, maybe a little more depending on..."
Strong: "For a project like this, the investment is $3,200."
Hesitation about your own prices makes customers question their value.
Social Proof in Pricing
People want to know they're making the same choice others have made successfully.
"This is our most popular package" "80% of our customers choose the Complete option" "Other restaurants your size typically invest $2,000-3,000"
Social proof reduces the anxiety of making a purchasing decision.
The Value Stack
Before presenting your price, build the value stack. List everything included:
"Here's what you get:
- Complete website design and development
- Mobile optimization
- SEO setup
- Contact forms and analytics
- 3 months of updates and support
- Training on how to make changes yourself
- One year of hosting
The total value is over $4,000, but your investment is just $2,500."
Handling Price Objections
When someone says "That's too expensive," they're really saying "I don't see enough value to justify the price."
Don't: Immediately offer a discount
Do: Revisit the value and outcomes
"I understand price is important. Let me make sure you're clear on what this solves for you..."
The Comparison Trap
Avoid comparing your prices to competitors' prices. Instead, compare your solution to the cost of the problem.
Instead of: "We're 20% less expensive than ABC Company"
Try: "This system will save you 10 hours per week. At $50/hour, that's $26,000 in savings annually"
Premium Positioning
If you want to charge premium prices, everything about your presentation must reinforce premium value:
- Professional proposals and presentations
- High-quality marketing materials
- Confident, consultative sales approach
- Focus on outcomes, not just features
- Testimonials from successful clients
Action Steps You Can Take This Week
1. Restructure your pricing page using psychological principles. Create three clear options with your preferred choice positioned as the reasonable middle ground.
2. Bundle your services to increase perceived value. Instead of pricing individual services, create packages that solve complete problems for your customers.
3. Test anchoring strategy with your current prices. Lead with your highest-value option to make other options seem more reasonable by comparison.
The Bottom Line
Pricing isn't just math - it's psychology. The same services at the same prices can generate dramatically different results based on how you present them. Your prices might be fair, but if you're not presenting them strategically, you're leaving money on the table and serving customers less effectively.
The goal isn't to trick people into paying more. It's to help them clearly see the value you provide and make decisions that serve their best interests.
