Good-Better-Best pricing helps bridge the gap between contractors and homeowners. This pricing strategy can also help you differentiate your services. Unfortunately, many companies and industries have yet to adopt this concept due to implementation concerns. Let’s take a closer look at the G-B-B approach and how the “power of choice” can drive high profit margins and new revenue.
What is Good-Better-Best Pricing?
Good-Better-Best is a tiered pricing strategy that commonly offers three product options for homeowners at gradually increasing prices. Specifically, this includes a “good” option, “better” option, and the “best” option. According to Harvard Business Review, it’s a “psychological pricing strategy” that gives the customer the ability to determine which option is best for his or her specific needs and circumstances.
In fact, Good-Better-Best pricing isn’t a new concept. It’s a proven strategy that gives homeowners the power to determine value. Some homeowners will value cheaper options due to their financial means, while others will value more expensive options with better materials or features. This model serves all sides of your customer base while helping you generate more growth and revenue. But how do you present G-B-B pricing? Implementation alone is one of the main reasons why many companies have yet to embrace this strategy.
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How to Implement G-B-B in Your Business
Implementing Good-Better-Best pricing doesn’t have to be as tricky as it may seem. If you’re currently offering one price point, use it as the “better” option. In addition, create a package that increases quality as the “best” option and a package with lower quality materials as the “good” option. In general, you want a tiered strategy that has a balanced progression of improvements.
You’re playing offense, defense, and consumer psychology all at once, notes the Harvard Business Review. And the goal is to make your products and services more accessible to more customers. As a result, defining this pricing strategy can help increase margins and give you more brand recognition in the process.
Don’t set a “good” price that’s more than 25% below the “better” option. Moreover, the “best” price should not exceed “better” by more than 50%. And make sure to create names for your packages that help homeowners quickly identify the best option for them.
*These numbers are sourced from Harvard Business Review
Bridge the Customer Gap with Leap
As you can see, Good-Better-Best pricing provides customers with options and clarity. And today’s technology can provide even more solutions. In fact, homeowners want more than pricing options. They want payment options too!
With Leap, your business can accept payments securely without having to manually record the transaction. You can present pricing, send documents, accept payments, sign contracts, and secure financing all in one place. It’s a big win for the industry that is already paying off for contractors across the country.
Home improvement companies find collecting payment to be more time-consuming than it needs to be. Offering payment options can boost sales, reduce turnaround time, and establish creditability.
With Leap, you can offer several payment options with the help of Leap Secure Sign, Payment Capture, and submit several credit applications and receive a decision instantly.
Contractors who utilize Leap are saving invaluable time and resources. And you can easily build and implement Good-Better-Best pricing into Leap with more customization. This all-in-one sales software can help you leverage your team to bridge the gap between your business and your customers.
Want to learn more about Leap and the Good-Better-Best pricing strategy? Schedule a demo below!
