You’ve seen it a million times. It might already be a staple on your website. I’m talking about a website’s pricing page with the standard three or four boxes of tiered offers. This ubiquitous price menu just might hurt your entire business.
Tiered pricing is a popular model, and this pricing menu page design is used by everyone from Slack to Zoom to just about any software-as-a-service company trying to grab hold of it. both business-to-consumer and business-to-business market share.
- The leftmost box (es) offer a free or low cost tier, acting as a Trojan horse to trick individual customers into trying the product with little risk.
- The middle box is always either the “Most popular!” Box. »Option or offer the” Best value for money! ” But this is really just a level of wholesale designed to achieve maximum penetration into teams without triggering a scrutinized business buy. That’s just enough money to slap a credit card each month without batting an eyelid.
- The far right box is always the Brass Business Sale, and in most cases you will need to call a sales representative to get prices and terms.
Do not mistake yourself. The tiered pricing model is extremely handy for capturing market share from all possible angles. But in cases where a B2C or small business-focused product is trying to break into the corporate arena, this type of pricing menu can lead your website to sell the wrong product at the wrong market, and you may end up selling the wrong product at the wrong market. end up with slow sales or no sales at all.
Here’s how to fix it.
1. Ask yourself if you are selling B2C, B2B or B2X.
Not long ago I wrote an article on the emerging B2X (business-to-anyone) commercial approach, one who takes a bit of B2B and a bit of B2C but is actually agnostic to both. The requirement for a B2X product is that it can comply with all consumer and business requirements and use cases at the same time, and thus, the benefits for consumers and businesses can be highlighted with the same argument.
Selling B2X is an elusive goal, and Zoom is one of the few decent examples of a true B2X business. While Zoom’s video-as-a-service software is primarily known as a competitor to corporate video conferencing, during the pandemic, Zoom has made big gains in the consumer, leisure and entertainment spaces as these spaces have grown. exploded during closings.
Slack looks like a B2X business, but I’m not sure even Slack knows what Slack is. Slack has its roots in B2B, but deep down it’s a chat app, which is traditionally a B2C product. This allowed Slack to make great use of the “Trojan Horse” free selling method by offering the product to individuals and teams for free so that it could grow virally throughout the organization.
While Zoom and Slack both use the four tier pricing approach, Zoom, the more B2X style product, actually lists their corporate rates on their website. Slack, on the other hand, like most B2B pricing paradigms, requires the customer to call a sales representative to find out the company’s pricing and terms.
2. Understand why tiered pricing doesn’t always work for B2B and B2X.
Here is where the error is made.
Most product-as-a-service can easily make the theoretical leap from individual sales to business sales, as the expense of delivering the product comes first. In other words, since the product uses the same infrastructure, materials, and labor for the first sale, additional customers can be added to a sale for very little additional cost.
But just because you can create and deliver a product to many people at the same time, doesn’t mean your corporate customer wants the same as your individual customer.
Zoom’s business pitch is easy to understand because it is a very B2X sale. In the B2C use case of Zoom, the customer wants to be able to communicate by video with one or more people. In its B2B use case, the organization wants its individual members to do the same. There may be additional bells and whistles in the B2B case, but these additional features are universal in B2C and B2B, just more in demand at the B2B level.
Most Product as a Service does not fit this B2X paradigm.
Take training as a service, for example. People buy training because they want to save time by improving at something and they also want the satisfaction and reward that comes with improvement.
At the enterprise level, while these benefits are important, the corporate client use case is quite different. A corporate client must be able to offer training as a service at any time, to one of its members, to achieve a skill level goal across its organization.
B2B selling should focus on processing speed and affordability over consumer priorities such as quality and time. It’s an entirely different sale to an entirely different type of customer.
This is why you should call a sales representative for B2B business sales, not because the price is a “secret,” but because the sale should be presented as something completely different.
3. Determine what you are selling and to whom.
If your sales model is not a true B2X and your sales pitch is more like the B2B model at the enterprise level, then you are actually selling two different products, as far as the customer is concerned. Yes, you might be using the same infrastructure, materials, and labor to build both, but customer expectations are very different for each.
Instead of the tiered pricing model, consider splitting the pitch early on in the sales funnel. This will help you avoid waiting for customers to identify themselves on your website’s pricing page.
Think about all those corporate customers you lose as they travel through the consumer funnel, only to be deterred by a B2C pitch or the bad customer experience of having to pick up the phone and speak to a sales representative. sales to find out more.