Why Your Startup’s Pricing Is Hurting Your Sales
Multi-tiered pricing is a simple way to grab quick market share, but it might dampen your enterprise ambitions
You’ve seen it a million times and it might already be a staple on your own website. I’m talking about a website’s price page with the standard three or four boxes of tiered offerings. That price menu might just be undercutting your entire enterprise business.
Multi-tiered pricing is a popular model because of its simplicity. That simplicity has in turn spawned ubiquity, and now the multi-tiered price menu design is used by everyone from Slack to Zoom to just about any SaaS company trying to grab both B2C and B2B market share.
- The leftmost box(es) offer a free or low-priced tier, acting like a Trojan Horse to get individual customers to try the product with little risk.
- The middle box is always either the “Most Popular!” option or offers the “Best Value!” But it’s really just a tier for bulk sales designed to get maximum penetration into teams without triggering a scrutinized corporate purchase. It’s just enough money to slap on a credit card each month without raising eyebrows.
- The right-most box is always the brass-ring enterprise sale, and in most cases, you’ll need to call a sales rep to get pricing and terms.
That’s how they get you.
Don’t get me wrong. The multi-tiered pricing model is extremely handy for grabbing market share from every possible angle. But in cases where a B2C or SMB-focused startup is trying to break into the enterprise arena, this kind of pricing menu can lead to selling the wrong product to the wrong market, and you may wind up with slow sales or no sales at all.
Let’s identify and correct that mistake.
Ask yourself if you’re selling B2C, B2B, or B2X
Not long ago, I wrote a post about the emerging B2X (business-to-anyone) sales approach, one that takes a bit of B2B and a bit of B2C but is actually agnostic to both.
TL;DR: The requirement for a B2X product is that it can conform to all consumer and business requirements and use cases at the same time…