Practical Sales Training™ > How to connect with your buyer > The Premium Effect
The Premium Effect
A single high price tag changes how buyers see everything else you sell. The Premium Effect uses that shift on purpose.
Add an expensive version of your offering. Your cheaper options suddenly look like better value. That happens even if barely anyone buys the expensive one.
What Is It
The Premium Effect means adding a higher priced version of your offering. That makes your lower priced options feel like better value. It also makes them feel higher quality, by comparison.
Hardly anyone needs to buy the premium option for it to work. So its presence alone shifts how buyers see everything else on the menu.
Why Does It Work
It works because it anchors buyers to a much higher price point. So your lesser offering suddenly feels like a great deal.
Say you expected a wheelbarrow to cost around £20. Then you find a supplier selling a £150 top of the range model. They also offer a £45 “entry level” version.
So you’d probably choose the £45 one happily. Even though it’s more than double what you expected, it still feels cheap.
A premium price also implies quality. If a seller can charge £150 for their top offer, buyers make an assumption. So some of that quality must show up in the £45 version too.
How Can You Use It
Build A True High End Version
Look at your current offering. Could you create an all out, maximum price version that includes everything?
Let It Raise Expectations For Everything Else
Think about how a higher value offer shifts what buyers expect to pay. So a strong premium option raises the price ceiling for your entire range. That happens even for people who never buy it.
When It Works Best
This works best when you already offer more than one tier. So adding a premium option above your current range costs little. But it changes perception across the board.
It also works well when the premium tier includes something genuinely impressive. So the gap between tiers needs to feel real, and worth the extra cost.
When It Becomes Dangerous
This backfires if the premium tier feels like a joke. Or if it’s wildly overpriced for no real reason. So buyers see through a fake anchor fast. Also, that damages trust in your whole range.
It also fails if your middle tier lacks real value on its own. So use the premium option to highlight genuine value elsewhere.
Common Mistakes
Making The Premium Tier Unbelievable
Setting the premium price too high makes it feel like a joke. So that undermines the whole strategy.
Underselling The Middle Tier
Your middle option needs to stand on its own. So no premium tier can save it otherwise. Make sure your mid tier earns its price first.
The Premium Effect – An Example
A video editing agency offers three packages. The Basic Edit costs £150, and the Pro Package costs £450. Then there’s the Platinum VIP Package at £1,250. It includes scripting, multiple formats, priority turnaround, and live strategy sessions.
Most clients choose the £450 Pro Package. That’s more than they originally planned to spend. So the £1,250 option makes it feel like a great deal by comparison.
So £450 suddenly feels reasonable, even affordable. The £1,250 offer also lifts how buyers see the whole brand’s quality.
Only a few people ever buy the top tier. But its presence alone drives more sales at the middle level. Clients also believe some high end expertise trickles down into the lower packages.
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