Price Laddering Optimizer
Design your Good-Better-Best strategy. Visualize price gaps and value progression to ensure your 'Better' option is the most attractive.
Tier Configuration
Value per Dollar (Bang for Buck)
- • Healthy ladder structure detected.
Optimizing the Steps
The visual slope tells the story.
The Middle Sweet Spot
The 'Better' bar (Value/Price) should ideally be the tallest. This maximizes conversion on your core product.
The Anchor
The 'Best' tier should have a high price to make the others look affordable.
The Fence
If the 'Good' tier has a high value score, you are too generous. Remove features to push people up the ladder.
Execution Steps
Define your 3 tiers: Good (Entry), Better (Core), Best (Premium).
Enter the Price for each tier.
Estimate a 'Value Score' (0-100) for the features included in each tier.
Analyze the 'Value/Price Ratio'. The middle option (Better) should ideally have the highest ratio to drive volume.
Pro Strategy
- The 'Best' tier often isn't meant to sell in high volume. It exists to anchor the price high so the 'Better' tier feels safe.
- Ensure the feature gap between Good and Better is significant (the 'Fence'). If Good is too good, no one upgrades.
- Avoid equal spacing (e.g., $10, $20, $30). It forces customers to do math. Irregular spacing ($10, $29, $79) focuses them on value.
Core Concepts
Goldilocks Effect
Consumers tend to avoid extremes (cheapest and most expensive) and gravitate toward the middle option. Use this to steer them to your highest margin product.
Decoy Effect
Adding a 'Best' option that is very expensive makes the 'Better' option look like a bargain, even if it's pricey.
Price Gaps
Gaps should usually widen as you go up. e.g., $10 -> $25 -> $50 (Logarithmic) feels more natural than linear steps.
What is Price Laddering Optimizer?
Price Laddering (or Tiered Pricing) is a strategy to capture different segments of the demand curve. By offering a hierarchy of products, you allow customers to self-segment based on their willingness to pay.
Best For
- • Structuring SaaS pricing plans.
- • Menu engineering for restaurants.
- • Creating product bundles.
Limitations
- • Requires clear feature differentiation.
- • Can lead to 'cannibalization' if the cheap option is too good.
Alternative Methods
Bundling
Combining products rather than tiering variations of one product.
Volume Discounts
Lowering price for quantity rather than features.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
SaaS Repricing
Most customers were staying on the $29 'Basic' plan.
Introduced a $99 'Pro' plan with advanced analytics (Decoy), and added one key feature to the $49 'Standard' plan.
Car Wash Menu
Customers choosing cheapest wash ($8).
Renamed tiers to Silver ($12), Gold ($18), Platinum ($25). Added 'Wax' only to Gold/Platinum.