If you’ve studied value pricing before, you’ve probably come across the idea of Goldilocks Pricing.
The idea is simple: always give clients three options—large, medium, and small (in that order)—to choose from. It’s your first chance to demonstrate your creativity to a prospect, it employs price anchoring, and it combats their need to get additional options from competitors.
I endorsed it in my Pricing Design book as my go-to pricing framework.
As I’ve taught it over many years, I’ve noticed an interesting tendency, likely brought on by the name itself. Many of my students assume that the goal of Goldilocks Pricing is to nudge prospects toward the middle option. Too cheap feels risky. Too expensive feels like a stretch. The middle options feels just right.
I’ve heard pricing gurus teach this too.
But the goal of any pricing framework is not to use psychological tricks to push someone toward one option. It’s to give your prospect as many ways to succeed as possible within their given constraints.
So I’ve changed my tune. I no longer endorse Goldilocks Pricing.
I suggest Papa Bear Pricing instead.
The problem with “Just Right”
In the original fairy tale, Goldilocks tries all three options and picks what’s “just right:” not too hot, not too cold, not too hard, not too soft.
But Goldilocks isn’t the role model we make her out to be. The moral of this story isn’t “find what’s comfortable.” It’s that Goldilocks was a snoop and a thief, which made her almost get freaking eaten by bears!
The real heroes of this story are the bears. Papa Bear liked piping hot porridge. Mama Bear loved a soft bed. Baby Bear had a cute little chair. None of them seemed to envy what the others had. They lived in peace until Goldi came along and committed a felony.
If you think your job is to find what’s comfortable for a client, you’re missing opportunities (for them and yourself). Your job is to help them make at least one fundamental decision they wouldn’t have made without you. That’s uncomfortable by nature. If a client wants comfortable, they should keep doing what they’re already doing, and they don’t need you for that.
Sleep researchers will tell you that what feels “just right” when you first lie down isn’t always what your body needs. The bed that felt perfect at 25 leaves you wrecked at 45. As the stakes get higher and the problems get harder, you need more support, not more comfort.
Turns out Papa Bear’s bed may have the most long-term benefits, which is exactly what you want to give your clients.
How to do Papa Bear Pricing
Papa Bear Pricing starts in your early conversations with a prospect.
One of the most important things to uncover is their biggest hopes and dreams. Most sales conversations skip this entirely; they stay focused on the immediate project and miss the bigger picture.
You also need a sense of what they expect to spend. You can ask about their budget, though I don’t recommend it anymore. I think it’s better to research standard market rates.
Here’s a real-world example. A law firm wants a new website. Your research tells you the average custom law firm website goes for around $10K. As you talk, you learn their bigger goal: become the go-to law firm for the construction industry in the southwest U.S., largely by acquiring smaller firms already in that space.
Now you have all the ingredients for Papa Bear Pricing.
Option 1: a full rebrand (renaming, new identity, matching collateral), new website, two-year content marketing calendar with copywriting, new sales materials, trade show collateral, and internal communications campaign. Everything they need to become the go-to player in a new industry. You’re pitching the bigger goal, not just the new website they asked for. You price this at $100K. That’s 10× more than what they expect to spend, but the value is easily 100×.
Option 2: a website redesign. Exactly what they came for. You price it at $20K. That‘s 2× their expected budget, but you’re confident you can deliver a website for them that’s twice as good as the average law firm website.
Option 3: a 1-week website sprint where you customize a Squarespace template for them. You price it at $5K. That‘s half what they expected to spend.
A few things worth noting:
Option 1 should be where you put your best foot forward. Pitch them the world. Show them what‘s possible. They won’t know unless you tell them. It should also be orders of magnitude higher than Option 2, making clear that what they initially wanted is just a piece of a bigger vision.
Option 2 gives them exactly what they asked for, but now it’s anchored by Option 1, which changes completely how it lands.
Option 3 is intentionally less that what they want to spend. This protects you if they say you’re too expensive. You gave them something smaller than their budget. Who does that?! An expert like you, that’s who.
Together, the wide range signals that there are many ways to work with you.
With Papa Bear Pricing, which option are you nudging them towards? There are 2 answers:
The top one. The Papa Bear option should sound so sweet to them that they’d be fools not to want it. They might not be able to afford it or afford it right now, but it should be something they’d jump on immediately if money weren’t a factor.
Any of them. Every option should be something you’d be excited to deliver, incredibly valuable for them, and very profitable for you. If an option doesn’t check these three boxes, don’t present it.
Comfort is overrated
Clients who are serious about their results almost always find a way to the top option. It might not be right away or all in one chunk, but working with an expert always exposes possibilities that return multiples.
Stop engineering your proposals around the option you think they’ll pick. Start engineering them around the option that actually solves the problem, and trust that the right clients will meet you there.
Be the Papa Bear. Make the big bed. Let them decide if they’re serious.
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