Three is the Magic Number

I started my sales career two days after I graduated from college. Vacation after school? Time off to travel the world? Spending a week on the couch watching ER reruns? (ER was my favorite show in college—who doesn’t love George Clooney?) Nope. I wanted to make some quick cash by mastering the strange and unknown world of selling.

I had no formal sales training. I learned by reading, getting mentors, watching successful salespeople, taking an online writing course, helping others, building my personal online brand and failing. I failed a lot.

When I failed, I tried to determine how I missed the mark. What did my competition do to win the bid? Did I wrongly quantify the prospect as being a good fit for our print-buying solution company? Did I need more insight or knowledge about the print solutions business? All of the above?

I discovered a common theme. I was losing prospects when I presented my company’s site cost. I charged a cost to set up the site, a monthly cost to maintain/service the site and an additional cost for our digital asset management module (file storage), if applicable. I presented the pricing with a savings analysis and value proposition, listing all of the needs the system would solve. But something was missing. My clients only seemed to be seeing my charges, the money they would have to spend. They were not seeing the services we could provide and, most importantly, the money they would be saving.

After a trial-and-error process, I discovered the magic of giving three (3) packages/pricing options.

I remembered how I had presented only two options to a mid-size restaurant chain. My most affordable package was not helpful for them because it didn’t include enough users and items. My more expensive package had five options—they didn’t need 500 users and 50 templates. “It seems like you don’t really understand our needs. Given your options, I’m not sure working with a client of our size is the best fit.” Obviously, two options were too few and five options were too many.

How about three options?

Offering three options gives the prospect flexibility and allows them to customize a solution that will work best for them. But they have to be good options.

Here are three tips for creating the desirable pricing bundles:

1. Come up with a clear and simple name for each of the three options. Use humor. Make a short and simple list of what each package includes. Make it super easy to read and understand. (See “Three is the Magic Number” Chart.)
2. Clearly distinguish how each package is different. The prospective client should not have to search to find out why one package costs more than another. As the number of users, templates, items and file storage increases, the cost increases. My “I’m Cheap” package may only allow for 50 users, but my “I’m Proudly Blowing My Budget” package may allow for 1,000 users.
3. Include a value statement with each of the three bundles. This should show the soft dollar cost savings your system provides. It may free up resources, time and space, and it may allow the team to be fully prepared for an audit without having to spend any extra time. No matter what you are selling, you must make your prospect know that you are adding value. The value must have a big enough impact so that their only option is to move to/ implement your solution.

I suggest running your bundles by existing customers and colleagues before you sell them. It’s very important to get feedback from the people that actually buy your sales package. I’ve created pricing structures that looked great to me, but, when I showed them to potential buyers, they brought up things I failed to consider. Your focus/test group can also share insight into how your competitors sell and market.

Giving your prospects the flexibility to pick a solution that works well for them and falls within their budget should help you dramatically increase the number of accounts you close. I like the number three: I was born on April 3, I have three sisters, there are three branches of government and the Giants won three World Series in five years. I like it even more because giving prospects three options has doubled the number of accounts I close.

Three is the Magic Number Chart