The price conversion gap

"So… what's your budget?"

Sarah watched her prospect's face freeze on the Zoom call. The silence stretched. His eyes darted away from the camera. Classic budget question panic. She'd asked the question that kills more sales calls than bad internet connections. The prospect mumbled something about "keeping costs reasonable" and "needing to think about it".

Another lead about to slip away.

Sound familiar?

You’re not undercharging.
You’re under-framing.

Asking for budget is like asking someone their weight.

You'll get an answer, but it's probably BS. People either lowball to negotiate down, or they're genuinely clueless about what things cost. Meanwhile, you're trapped in this awkward dance of trying to guess what they can afford while they're trying to figure out your minimum price.

Most founders assume they need massive audiences to charge premium prices.

"I need 10,000 followers before I can raise my rates," they tell themselves.

They're obsessed with scale, not conversion.

I know founders with 50,000 followers who can't pay rent, and others with 500 who are booked solid for months.

Don’t lower the price.
Lower the friction.

This pricing paralysis isn't just awkward.

It's expensive.

Every time you discount because you're scared of their budget, you're leaving money on the table. Every time you offer just one option, you're forcing people into a binary yes/no decision. Most say no, not because they can't afford it, but because they don't have enough control over the decision.

When people have only one choice, their brain defaults to "should I buy this or not?"

But give them three options, and their brain shifts to "which one should I choose?"

That changes everything.

The $6 popcorn was never about popcorn

Nobody orders the basic car model.

Nobody buys the small fries at McDonald's.

Nobody chooses the small popcorn at cinemas.

These options exist as psychological anchors, not real choices.

You see small ($5), medium ($6), and large ($10) popcorn. Your brain immediately dismisses the small as "poor value" and gravitates toward the medium or large. The small option makes the medium look like a bargain.

This is the centre stage effect in action.

When faced with three options, research from behavioural economist Dan Ariely shows that 60-70% of people choose the middle one. Your brain interprets it as the "sensible choice". Not too cheap (risky), not too expensive (wasteful).

But here's the genius bit: you get to engineer what "middle" means.

How big brands engineer your choices

Apple doesn't sell one iPhone. They sell three main models that guide you toward their preferred choice.

Analyst reports consistently show that Apple's standard iPhone model outsells both the cheaper and premium versions. Exactly what you'd expect from the centre stage effect.

Netflix doesn't offer unlimited pricing options. Three clear tiers that make the middle option irresistible.

These companies understand something most founders miss.

People crave choice, but too much choice paralyses them.

Three options hits the sweet spot between control and simplicity.

Yes isn’t cheaper.
It’s clearer.

I restructured my web design pricing around this principle and watched my conversion rate jump from 45% to 80%.

My typical projects range from $5,000 to $50,000.

For every 10 leads, that’s an extra $20-$200k in revenue.

The key isn't just offering three options. It's understanding the psychology of what each tier represents to your prospects. When you structure them correctly, people naturally gravitate toward the option that fits their situation.

Get this wrong, and you can actually hurt your conversion rate. Get it right, and you eliminate awkward budget conversations while increasing your average deal size.

Sarah implemented this approach on her next five sales calls.

No more awkward budget questions. No more awkward silences. No more discount requests. Instead of defending a single price point, she presented three carefully engineered paths forward and let prospects choose their own adventure. Her close rate tripled, and her average project value doubled.

The lesson? You don't need thousands of followers to build a thriving business. You need the right psychology applied to the right choices.

Stop asking what they can afford. Start engineering what they'll choose.

Until next time,
Dave