Basic-Plus Pricing

Description

Start with a basic product or service. Then for charge for each additional item or improvement.

With physical products, this can be 'bolt on' or 'plug in' extras, or can be similar models in the same product range, but with additional features built in. With services (which may also be sold alongside products), each service can be charged at the standard rate.

Example

A car sales company offers a basic model, but will work to sell customers increasingly more sophisticated cars. They then try to add on financing and maintenance contracts.

An IT service company has a 'basic' service package that involves an annual check-up. All other assistance is charged at a premium rate.

Discussion

The underlying principle of basic-plus pricing is that the customer is anchored by the basic price such that the influence of this initial amount continues to make the customer think what they are buying is cheap, even though the price steadily escalates.

Basic-plus pricing requires that you are able to present a 'basic' and then add levels of 'plus'. Some companies cannot do this or prefer other pricing models. The other end of the scale to 'basic plus' is 'all in', where customers pay a single price and everything else is included in the price (or added as a 'free extra').

'Upselling' is a sales term used to add extras to a basic sale.

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Basic-Plus Pricing

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Quick links

Disciplines

Techniques

Principles

Explanations

Theories

And