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Estd 4.22.2023
Labeling a plan as “Most Popular” or “Best Value” can indeed have a significant influence on what customers choose. These labels act as social proof and guide customers toward the option that appears to be the favorite or the best deal, which is a key behavioral insight emphasized in our SaaS pricing book, Price to Scale.
Below are some of the key points from Price to Scale related to this strategy:
• Impact on Customer Choice:
– Customers often feel more confident opting for a plan that is highlighted as a preferred or “best” option.
– The label provides a shortcut for decision-making, especially for buyers who may be unsure about which plan best suits their needs.
• Determining Which Plan to Highlight:
– The decision should be based on a thorough segmentation of your customer base. Consider factors such as usage patterns, price sensitivity, and the specific needs of different cohorts.
– Analyze the revenue optimization trade-offs of each plan. Our book discusses how balancing customer acquisition with the price customers are willing to pay is crucial, and the highlighted plan should be the one that best achieves this balance.
– It is also important to ensure that the plan you label aligns with your company’s overall strategic goals, whether that is maximizing market share, driving higher usage, or generating a predictable revenue stream.
• Practical Application:
– Look at your data to determine how customers are interacting with your current plans.
– Identify which plan has a combination of features and pricing that meets both customer needs and your financial objectives.
– Once identified, using labels such as “Most Popular” or “Best Value” reinforces that analysis and helps steer new prospects toward that plan.
In summary, as Price to Scale outlines, using a “best value” or “most popular” label isn’t just a marketing tactic—it’s a strategic decision that should be grounded in customer segmentation, revenue optimization analysis, and the overall value delivered by that plan. This approach ensures that the label not only attracts attention but also supports your broader pricing strategy.