product pricing

By Rieva Lesonsky

Sometimes, making a small change to the way you do things can have a big result. Today I was doing some online research when I came across a method of making a sale that stopped me in my tracks. Toggl, a time tracking software provider, lists three different levels of product pricing  on their website. However, unlike most websites, they list the highest-priced product first (take a look on the Toggl pricing page).

Offering different product pricing for different service levels is a tactic that many small businesses already use to attract more customers, but Toggl’s move is super smart. Our eyes naturally start reading on the left side of the page (or website). However, most websites that offer three levels of product pricing start with “free” on the left side, moderate pricing in the middle and the highest price on the right. That means people look at the free version first, and if it has everything they need, they’re likely to just briefly scan the higher-priced options, if they look at them at all.

By putting the highest-priced level where we’re most likely to look at it first, Toggl is subtly “selling us” on all the features that come with their paid package. When you see all the things you can get for just a little bit of money, you’re less likely to even bother looking at the free version. And even if you do check out the free option, it probably sounds chintzy to you now.

What can you learn from Toggl’s savvy product pricing tactic? Here are three lessons that come to mind:

  1. Don’t be afraid to try something different. Lots of small business owners get intimidated by the idea of innovation, thinking you have to be a Steve Jobs-level genius to do it right. But thinking different doesn’t necessarily mean you have to throw all the rules out the window—just a few of them. Toggl’s website uses the same basic format hundreds of other software-as-a-service sites do, but has one important difference. Tweaking your “same old same old” just a little bit can have big results.
  2. Stay one step ahead of the pack. If everyone else starts putting their most expensive package where customers see it first—or promoting their highest service level from the get-go, instead of starting with the “basic package” and adding on—Toggl’s tactic will inevitably lose some of its effectiveness. But for now, they’ve got an edge on their competitors by doing it this way. Keep your eyes on your competition, monitor their moves and be willing to zig when they zag.
  3. Test and re-test. The Internet offers even the smallest business the ability to constantly test, improve and upgrade everything from its business website and product offerings to its marketing methods, timing and message. Take advantage of this flexibility to try different things and see what gets the best response from your customers. If something works, great—if not, try a different approach. There’s no longer any excuse to settle for the status quo or to accept “average” sales as the best you can do.