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Option 2 presents the choice as follows: Which widget package would you like

to buy?

Chances are, some consumers will choose the Exclusive Premium Version,

others will choose the Budget Version, but most will opt for the Even Better

Version. You don’t want to go too crazy, but you can experiment with this model

to add yet another tier in the form of a “really premium version” at the top or a

“freemium” version at the bottom that lets customers try part of the service

without paying anything.

Now let’s look at how the money works out for both of these options.

Option 1: Option 2:

20 sales @ variable prices

20 sales @ $87 (14 choose middle,
3 choose budget,

3 choose premium)

Total income: $1,740 Total income: $2,664

Income per sale: $87 Income per sale: $133

Difference: $924 total, or $46 per sale

The key to this strategy is to offer a limited range of prices: not so many as to
create confusion but enough to provide buyers with a legitimate choice. Notice
the important distinction that naturally happens when you offer a choice: Instead
of asking them whether they’d like to buy your widget, you’re asking which
widget they would like to buy.

Options for creating a price range include: Super-Amazing Version (Gold,
First Class, Premium), Product + Setup Help (the same thing sold with special
help), and any kind of exclusivity or limited-quantity selection.

You can literally sell the same product at different prices with no other
change. As long as you don’t imply that there are added features in the higher-
price version, it’s not unethical. Big companies do it all the time; it’s how cell
phone carriers, hotels, and airlines make money. To reduce confusion, though,
it’s better if you can add something with real value to each higher-level version
of the offer.