Understand Your Buyer > How to connect with your buyer > The Premium Effect
What is it?
Having a higher priced version of your offering can make the lesser priced versions seem better value and of a higher quality by association. Whilst not many still purchase your premium offering, a premium offering can drive sales at the lower end of your offering.
Why does it work?
It works because it anchors your potential buyers to a much higher price point which makes the lesser offering seem like a great deal.
If you thought a wheelbarrow was perhaps £20 and found a supplier who has a top of the range £150 wheel barrow and an “entry level” £45 wheelbarrow, then you are more happy to buy the £45 version despite it being double your expectation as its so much “cheaper” than the £150 version.
It also implies a higher level of quality. If the seller offers a £150 version of their product then surely some of the quality of that makes it’s way into the £45 product?
What can you do about it?
Considering your current offering, could you create an all out maximum value and maximum price high end version that includes everything?
How could you create a higher value offering that will deliver on the value as well as help to raise the price expectation for your entry level items?
Example:
A video editing agency offers three packages:
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Basic Edit – £150
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Pro Package – £450
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Platinum VIP Package – £1,250 (includes scripting, multiple formats, priority turnaround, and live strategy sessions)
Most clients choose the £450 Pro Package, even though it’s more than they originally intended to spend-— because the £1,250 package makes it feel like a great deal by comparison.
Why it works:
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£450 now feels reasonable, even affordable
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The £1,250 offer elevates the brand’s perceived quality
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Even if only a few buy the top-tier option, its presence drives more mid-level sales
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Clients believe some of that high-end expertise “trickles down” into the lower packages
See also
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