The first time I charged a mid-sized company to do work for them was in college. I was buying a scooter from a Ducati Motorcycle dealership, and somehow my nerdy self started telling the owner of the dealership how his SEO sucked and it was hard to find him online.
He was intrigued.
He wanted me to help him with it.
He asked for a proposal.
He wanted to know an actual price.
“I’ll charge him $500!” I thought to myself. That was SOO much money to me back then. Totally worth it for a few weekends of work!
I told my mentor about this pricing plan, and if it were legal, he would’ve slapped me across the mouth for charging so little to such a big business.
“You need to charge TEN TIMES that amount!” he said.
“$5,000 for some SEO work? Are you insane?” I protested.
He then showed me several ways to figure out how to charge a business more money for your work, without scaring them off.
One of my favorite ways he showed me to price something called Three Pronged Pricing.
Here’s how Three Pronged Pricing works:
You have 3 different options which people can pick from like this:
This is a super-safe way to make sure you still get the business at your normal rates, but drastically increases the chances of you getting a WAY bigger contract.
In my case, I went from getting $500 for the gig……to them happily paying me $5,000 for the gig.
So lemme show you some real examples and give you a template you can use for your own Three Pronged Pricing:
This pricing structure actually adds a helluva lot of value to your client….because often they DON’T KNOW WHAT THEY NEED.
So in one simple chart you show them what they can get for different prices. They also feel like they have a choice, not like they’re getting strong-armed into some scam.
See how they can CHOOSE whichever option is best for them and fits their budget?
So if there’s someone like me who is charging $500 but doesn’t know what the client’s actual budget is…..then I can throw in a “Super Awesome Rockstar Package” that costs $5,000.
If the client scoffs at that price, you know it’s too high. But you’re still safe because you have the low price.
And it seems most often people go with the mid-range option because they don’t want to lose out on some of the extras they get.
This pricing structure works well for products, services, and especially consultant rates.
You can see examples of this Three Pronged Pricing Technique all over the interwebbers:
Tiered Pricing Examples:
Heck, even years ago when I sold my first-ever digital product I used this Pronged Technique.
I was offering a product for $99 and then for $167 they could get the product AND a half-hour call with me. So I had a “Two Pronged” pricing structure.
It looked like this:
Back then my time was worth like $2/hour, so I was ecstatic when about 30% of the people who bought selected the more expensive option!!
I made so much more money than I ordinarily would have just charging for the product alone.
If I was smarter back then, I would’ve even added something like a $1,200 version where I would help them fully set up their first store in a day or two.
So the point of this email is:
“If you’re trying to get for more money for a product or service, try this Three Pronged Technique to show your clients you have more to offer for more money!”
I’ve gone ahead and created a template you can fill in to see how your pricing structure would look when you present it to clients.
In the template I filled in the example of someone who builds WordPress sites for a living. Watch how their $800-per-site rate goes up by offering more services:
I can’t tell you how many consulting clients of mine have used this, and within a week told me…
“…I showed two new clients the pricing chart, and both of them went for the more expensive options!!”
Hopefully you have similar results :-)
Please share this with any friends or colleagues who could use this.
Best of luck,
P.S. Need some more help on pricing out your next freelance project? Checkout our Freelance Pricing Calculator!
P.P.S. You can also checkout my post on becoming a copywriter that discusses some of these techniques (with examples) more in depth.
P.P.S. You can see more examples of Tiered Pricing in my pricing swipe file.