WHY?
Why am I talking to a bunch of lawyers about three tiered pricing. Mostly for two reasons -
It is a continuation of my desire to focus on, and re-centre the Power of Attorney and in particular the second half of retirement in our Estate Planning discussions; and
This naturally leads to the use of three tiered pricing, which is helpful to your business
THREE TIERED PRICING
Once you start looking for it you will see it anywhere. A lot of big businesses that are selling either ongoing solutions (like software) or professional services offer a three tiered pricing structure, or something like it (so three tiers plus a free tier, or three tiers plus an “enterprise” tier). There is a reason for this, in the context of this conversation we will look at how it allows you to centre your preferred offering.
Okay, so this is four tiered pricing, but the idea remains the same.
COMPARISON IS THE THIEF OF JOY
Essentially three tiered pricing works because of the human tendency to compare things, though the difference is that you are deciding what options the potential customer is comparing. You are giving the potential customers the good, better and best comparisons. Perhaps in the case of the examples that I give during my training, you are giving “fine”, followed by better and best.
You can find plenty to read online on this topic, including getting more examples of how other businesses are using it, but some articles on the topic include this one, this one and this one.
You are also giving your clients clarity. If clients are adamant that they want the simple documents, then they are directed to the package that is “fine” but you are super clear on what that package does not include. The clients can always move up a package if they want more, but you have been crystal clear about what they are getting before they sign up. This not only starts the relationship with the client off on the right foot, but keeps those simple documents where they belong, with simple processes and simple prices. If the client doesn’t like the simple options, there is clarity for them as well. Clarity around what they will get if they move up a package, and what will be added to their process if they make that choice.
WHAT DOES THIS HAVE TO DO WITH ESTATE PLANNING?
If you are wanting to re-focus on the Power of Attorney, then you probably should not restrict this all inclusive planning option to clients who want a discretionary testamentary trust or complex drafting involving loans or UPEs. There should be a tier of your pricing that is for people who want a “normal” Will, but a complete aged care or retirement plan. I personally have two very long Letters of Wishes, one for death and one for before death. I don’t offer those up to my simple document clients, mostly because they wouldn’t complete them. I reserve the more complicated documents for higher packages. Should a longer Letter of Wishes, with significant aged care considerations, and an Advance Care Directive that does more than talk about palliative care be reserved only for those clients who want a discretionary testamentary trust? I don’t think so.
In most firms you will no doubt retain the tier that is for “I just need a simple” whatever. So, presuming that you already have two pricing tiers (one for simple Wills, and one for discretionary testamentary trusts) this tier would be for a middle of the road Will, but a complete and complex retirement and aged care plan.
DIFFERENTIATE YOURSELF
Most of the marketing from other firms at the moment is focused on needing more than a simple Will, as it should be. This is an important thing that we need to keep preaching. However, you would be different if your marketing focused on doing more than appointing an Attorney and a Guardian. You would be different if your blogs and emailing marketing included a focus on Advance Care Directives, Letters of Wishes (one for death, one for life) and how superannuation and total and permanent disability insurance might become part of the plan if there is a sudden injury.
While people need to realise that they don’t want a simple Will, your potential clients also need to learn why they should do so much more than appoint an Attorney. Your marketing and your pricing will point them towards that package that encourages them to do just that. This is a situation where clarity is kind, clarity around your price is kind because it points them to the package that is for them. This is not just a sales pitch, this is about walking the walk, and using your Estate Planning packages to focus on something that is very important. Every week we see another article about aged care, how people are being treated, and whether or not older people still get to make choices as they age. You aren’t just creating a pricing strategy, you are responding to a real issue.
ONLINE TRAINING
Three tiered pricing can be a really effective strategy for focusing your client’s attention where you want it. I have prepared an online course that focuses on why you would use it in Estate Planning, and how you would use it. We step through the reasons that we want to center the second half of retirement as part of the Estate Plan, and how we are using our three tiered pricing to not only centre that, but to also be really clear with our clients from the beginning.
Set of precedents
I am also working on a set of precedents dealing with a three tiered pricing system, including costs disclosure and easy to use checklists. If you want to find out more about those as they are developed, and get a discounted offer when they are ready, then you could join the waiting list.
