This podcast episode uncovers what 3 tier pricing is and why it might be smart to consider this method for your art business. The psychology behind why people buy art often has to do with the price point almost as much as the visual aspect. You could be ignoring an entire segment of customers by not taking perceived value into consideration. Listen to this podcast episode for clarity on the 3 tier pricing subject.
Tier examples: (Prices may vary)
Tier 1- High prices, a select few number of buyers.
Example: Original artworks with a $1,000+ price tag.
Tier 2- Middle prices, a variety of buyers.
Example: Canvas or paper prints between $100 and $1,000.
Tier 3- Low Prices, everyone can afford this.
Example: Small prints, stickers, magnets, mugs, totes, etc.. selling for less than $100.
Now that you know what tiered pricing is, I’m going to talk about WHY it’s important.
Offering only 1 tier is completely ignoring the buyers on the other tiers.
If you only have high price items, you’re ignoring buyers on a budget. Single moms/dads, people who love what they do but don’t necessarily make a ton of money (teachers), etc.
On the opposite side, offering only small items means you’re ignoring the people who want to spend money on what they see as high quality art. There is a very strange correlation with dollar value and actual value. If you pay a lot for something you automatically take more pride in it and love it more. It’s a weird psychology thing. If a buyer comes on to your website and he/she is used to paying $1,000 or more for an original from others artists but yours are priced at $300 or less, then they will see your product as not as worthy and might pass you up.
I am one of those bottom tier people who won’t buy art if it’s over $100. Terrible, I know, but several of my students have offered the bottom tier level with stickers or magnets and I buy it as soon as I see it! I actually have not told them this yet but if I see one of my students (those in the Artist Academy Advanced) offer anything $20 or below, I will buy it if I like it. I have bought bird magnets from Aimee Joy. I’m part of Meg Wagler’s subscription box club every month. I bought one of Christine’s awesome stickers. I even bought Lyssa’s print of an amazing ocean wave because she has been with me from the beginning and this was the best painting I had ever seen her complete. I just had to have a print of it! It was about $60 and I gladly paid her for it because I loved it soooo much. I’ve also bought several things from podcast guests including a tote from Alyse Dietel @amilliontinylines. I own one of Tram Colwin’s mini butterfly paintings, and the list goes on!
Q: If you’re offering such a low entry level price point will it deter those middle buyers from buying?
A: I was scared of this happening but nope. Four of my $7 print club members have bought higher priced prints from me in the past couple months.
An example of 3 tier pricing in my business:
Tier 1: $500- $3000 originals
Tier 2: $40-$350 canvas and paper prints
Tier 3: $7 print of the month club (+residual income aspect)
See what my print of the month looks like HERE.
With $7 per month I’m catching those customers and friends who don’t want to spend a ton on art and I’m spreading their payments out really far. I think of it as $7 for 1 year equals $84. Hardly any of those people on my $7 per month club would drop $84 on a print right now but creating that residual income aspect helps to keep them coming back and spending little by little.
This segways into next week’s solo episode all about residual income. I am a huge fan of that term and the possibilities that can come from it and that’s why I wanted to devote a whole episode over the residual income method. Stay tuned until next week!