How to price complex products.
(ex. Custom kitchens, complex software, copywriting projects, etc.)
Have You Ever Done This?
You know that moment when you’re launching a product or service and you think:
“Damn. I can’t put the price for this online. It’s too complicated.
You might find yourself asking questions like:
- What if they need something tailored?
- How will I know their needs?
- Our product has 1300 options, how will I know which to give them?
- What if I price too low and leave money on the table?
This Approach Seems Logical, Right?
The reasons behind this approach make sense.
- You want to make sure the buyer gets great value.
- You want to make sure you get paid.
- You want to ensure you tap into the buyer’s needs.
- You want to find the right solution for them.
These are all great motivations. However, I’d argue that upon deeper inspection, this approach is less and less effective in the modern era.
It’s based on information asymmetry, and that’s not how people buy anymore. Yes, customers might indulge in this process, but if you could provide them an easier, lower friction way of buying wouldn’t that be worth exploring?
What Bespoke Pricing Is (Really) Saying:
I’ve been there, I empathize. This might resonate with you, it might not – but here’s what I think we’re really saying when we insist on doing this.
- We haven’t figured out how to make the process easy for a buyer.
- We’re making things hard on ourselves by erecting barriers.
- We’re making things hard on the buyer by erecting barriers.
- ie. We’re in our own way.
- We’re scared to let the buyer make their own decision.
- ie. We’re scared they’ll leave.
- We aren't sure how to educate our customers in a low-touch way.
- We haven’t taken cues from frictionless buying experiences.
- We don’t have enough pricing options to capture the buyer.
Price Represents The Degree To Which You’re Solving a Problem.
Instead of: $10, $100, $1,000, $10,000, etc. what we’re really saying as our prices and products get more expensive is:
- We’ll solve this a little bit. ($0)
- We’ll solve this a little bit more. ($10)
- We’ll definitely solve it this way. ($100)
- We’ll solve it in a major way. ($1,000)
- We’ll solve it well, for a long time. ($10,000)
You’re The Pro, You Decide.
Step into my world for a moment and try things my way. Instead of crafting a new price every time, what if you had a wide palette of solutions (ranging from $0 to $1,000,000+) that solved a customer’s problem?
Imagine 3-5 buckets/tiers a customer could pick. You make a recommendation on which you think is a fit, and then on the call you can upsell, downsell, add pieces in and help them hone in on the right fit for them.
What’s key is that you make the recommendation via your website or whatever marketing property the buyer is interacting with.
If you isolate price as an issue, move them down, if they have more robust needs, you can move them up. Your product/price mix makes you nimble.
What About Tech?
I was in SaaS for five years, so I understand the pull product companies have towards leaving their prices off their site and building something bespoke. I fully understand that some implementations are truly massive in scope to the tune of a $10M+, but if you’re a pro and you’ve done it before, you can provide them with a ballpark range.
If we can customize a $200K car online and get price and financing, we can offer buyers a way to easily customize their solution while educating them at the same time.
Conclusion: Price Value, Not Inputs.
When you’re pricing on value and outcomes, not hours – pricing is easy. If you have to calculate your hours for each project, yes things might get messy. But why are you pricing that way? Why is anyone pricing that way?
What matters is the output and value for the customer – ie. the degree to which their problem is solved.
The Best Part? You Can still Offer Bespoke Pricing.
And guess what? You can still offer bespoke pricing as one of those options. You can build a pallette of offers around that pricing, and pull bespoke pricing out as needed when a buyer truly demands something unique that you hadn't planned for – that's a major difference.
You aren't a bespoke business, you're a business that (sometimes) offers bespoke pricing once, and then builds a package around that for next time.
I call these, "ad-hoc" products and you can learn about them here:
Okay, James, I'm Convinced.
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