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How To Know Your Service Options are Mispriced

I’ve run into several professional services providers who have introduced service options in their practice, but there’s a snag with how those options are crafted. The essential problem in common for these providers is that the third option, their premium choice, didn’t offer enough perceived value and it was priced too low.

It’s an easy problem to diagnose: each of them had way too many clients picking their “premium” option.

Airline Travel as an Example

Airline pricing offers a general model of how to think about constructing options if you’re a services provider.

I have a board meeting in New York in May for which I just booked reservations on Delta. The least expensive seat available in the main cabin is about $250 round trip, while a first-class ticket is priced at close to $1,000.

For one of the flights I booked, there are almost 350 passenger seats available on that plane. Of that total, only twenty seats, a little over 5%, are in first class. What that means is that Delta ideally will sell only one first class ticket out of every seventeen they sell for this Airbus A321 seating configuration.

Each of the services providers I referenced above had a much higher proportion of clients picking the third option. There’s no magic formula, but when you have one out of three (in one case) clients picking the third option, the pricing/value construct is way off.

It’s not enough just to offer three options in a “good, better, best” configuration. The value offered in those options must be thought through carefully and priced accordingly.

The "Velvet Rope" Option

The third option, in particular, needs to be an exclusive, “velvet rope” option. It’s for those clients, your raving fans, who want as much of you and your service, loaded up with value, as you can give them. They want to get behind your velvet rope, and they are willing to pay for the privilege.

That velvet rope option needs like a premium option and not just a marginally better seat on your plane, if you will. It shouldn’t be priced at some amount of percentage points higher than the “good” and “better” options; the price for your “best” offering should be a multiple of the price for the first two options. In Delta’s case, a first-class ticket is priced four times higher than the cheapest ticket.

As a services provider, you can offer premiums which Delta can’t. No one sitting in first class is going to land at LaGuardia any faster than those in the back of the plane. If you’re a services provider, though, you can offer a variety of premium options, including priority service and faster delivery, unlimited phone conversations, faster returned calls, service guarantees, and work product performed by you or another partner instead of a less experienced provider, just to mention a few ideas.

Every Service Provider is Different

Every service provider is different. Further, diverse clients among your target niche have varied ideas of how they value the variety of services they purchase. Further, I’m not offering the Delta example of pricing first class seats as a strict model for how you should handle your own premium offering. Yours could be less than four times your standard offering, and it could be much more, depending on the options you offer. It could even vary from client to client if your service is highly specialized.

Here’s the point: when you’re trying to improve your overall pricing structure, you don’t just roll out three options and leave it at that. You must do a lot of homework and think very carefully about the clients you serve, what they value, and how you can meet that value to maximize the pricing benefit you’ll receive from offering service options.

(This post was also made on LinkedIn on April 19, 2023 in John's LinkedIn newsletter, The Price and Value Journey)


John Ray advises solopreneur and small professional services firms on their pricing. John is passionate about the power of pricing to change the trajectory of a business and the lifestyle choices of a business owner. His clients are professionals who are selling their “grey matter,” such as attorneys, CPAs, accountants and bookkeepers, consultants, marketing professionals, and other professional services practitioners.

John’s book will be released later this year. The book covers topics like value and adopting a mindset of value, pricing your services more effectively, proposals, and essential elements of growing your business. For more information on the book, as well as John's podcast, The Price and Value Journey, go to


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