Many ranges accumulate rather than being designed: a product added for one customer years ago is still on the price list, and a service invented to win one job has not had its margin checked since.
The product ladder is the architecture underneath what you sell: an entry tier, a core, a premium tier, and a continuity layer running beneath all three. Every tier has a job, and the job is not always revenue. Without the tiers, a customer has nothing sensible to buy next.
The four tiers and what each is for
Entry — it removes risk for a new buyer
Its job is to let somebody find out what you are like without betting much. If you judge it on margin you will kill it, and with it the mechanism that feeds everything above it. Judge it on how many people move up.
Core — it pays for the business
It is what you are known for, it is where most of your delivery capacity goes, and it should be the easiest thing in the range to buy, quote and deliver. Your core should be standard enough to quote and deliver the same way each time.
Premium — it sets the anchor and serves the few
There are always customers who want the problem taken away entirely and have the budget to pay for it. If the most expensive thing you sell is your core offer, those people buy the core, receive less than they wanted, and you leave the difference on the table. The top tier also changes how the middle reads, because price is judged by comparison rather than in isolation.
Continuity — the thing they keep buying
A maintenance plan, a retainer, a service agreement, a consumables order. It is the base load: revenue that arrives in January whether or not anyone sold anything in December. It is also the reason a customer thinks of you first when the big job comes round.
Why does a missing tier cost real money?
A badly built range shows up as three problems.
Discounting. With no entry tier, the only way to make the core affordable to a nervous buyer is to knock money off it. So you erode the price of the thing that funds the business in order to serve people who should have been buying something smaller.
A flat average sale that will not move. If everything you sell sits in a narrow price band, revenue can only grow by finding more customers. A range with tiers grows two ways: more customers, and existing customers moving up.
Complexity. The opposite failure is a range that has quietly grown to thirty things, each with its own delivery method, none properly costed. To a customer, it reads as a business that cannot say what it is for.
A worked example
Illustrative arithmetic rather than a client. Take a signage and print firm turning over roughly £300,000. It sells essentially one thing: a fit-out averaging £2,400, about 120 a year. Quoting is constant, discounting is common.
Now build the tiers deliberately. Add an entry product: a £150 design-and-visualisation pack, sold on its own and credited against a fit-out if they proceed. At 200 a year that is £30,000, and some of those buyers convert into fit-outs that would otherwise have gone to whoever quoted cheapest. Add a premium tier: a whole-site rebrand rollout at £9,500, project managed, phased, with one point of contact. Eight a year is £76,000 from people who were previously buying a £2,400 job and quietly ringing somebody else for the rest of the work. Add continuity: a £95 a month maintenance and replacement plan. Forty customers on it is £45,600 a year that arrives without being sold.
Test a fourth effect rather than assuming it. Once £9,500 exists on the page, £2,400 stops being the expensive option. If the average core job moves to £2,650, that is another £30,000 across 120 jobs for no additional delivery cost. Test it on the next twenty quotes before you believe it. None of that required a new market, new premises or a new skill. It required somebody to sit down with the range and ask what a customer buys before the core job, what they buy instead of it when they have real money, and what they buy every month regardless.
How to apply it this week
- List everything you sell with three columns. Record the price, the gross margin, and the hours of your best people each one consumes. Look for any product that uses a lot of capacity at a low margin.
- Sort the list into the four tiers. Work on the empty tier next quarter.
- Write the premium offer properly. One page: what is included, what it costs, who it is for.
- Give every product a defined next step. Beside each one, write what the customer should buy after it. If any product has no answer, design one.
- Design one continuity offer. What could a customer sensibly pay you monthly for that is useful to them? Maintenance, monitoring, priority access, consumables, review.
- Retire or reprice one thing. Start with the lowest-margin item that takes the most effort to deliver.
Common mistakes
The first mistake is adding products instead of building tiers. Every time a customer asks for something slightly different, a new line appears on the price list. After ten years there are twenty-eight products, no structure, and a sales conversation that requires the owner to be present because only they can navigate it.
The second mistake is treating the entry tier as a discounted version of the core. A cut-price core teaches customers that your real price is negotiable and delivers a worse experience of your main product. A proper entry tier is a different, smaller, complete piece of work with its own value.
The third is refusing to build the top tier because "our customers would never pay that". Some of them are already paying it to somebody else for the part of the job you do not offer.
Questions to ask yourself
- Out of 10, how deliberately designed is your range, as opposed to accumulated?
- What is the most expensive thing a customer can buy from you, and when did you last offer it to anyone?
- Which product consumes the most of your best people's time, and what is its actual gross margin?
- If a good customer asked what they should buy next, would every person in your business give the same answer?
Where this fits
Range, pricing and margin are core Business Coaching work. Before you chase the extra revenue, read Profit vs Cash — a new premium tier can consume cash months before it pays. And if that tier involves multi-stage delivery, Project Management and Scope is what keeps its margin intact.
Get the next one in your inbox
One guide for business owners each week. You can unsubscribe at any time.
Common questions
Will an entry-level product cannibalise my main service?
It will if you build it as a cheaper version of the core. A discounted core teaches customers that your real price is negotiable and gives them a worse experience of your main product at the same time. A proper entry tier is a different, smaller, complete piece of work with its own value, such as a paid diagnostic, a design pack or a single site survey. Judge it on how many buyers move up rather than on its own margin. If you judge it on margin you will kill the thing that feeds every tier above it.
What if my customers would never pay a premium price?
Some of them would not, and the premium tier is not built for them. It is built for the few who want the problem taken away entirely and have the budget for it, and it does a second job even for the people who never buy it, because price is judged by comparison rather than in isolation. Once a larger option exists on the page, the core stops looking like the expensive choice. For the part of the job you do not offer, some of your customers may already be paying a premium price to somebody else.
What counts as continuity revenue in a service business?
Anything a customer pays for on a repeating basis that is useful to them: a maintenance or replacement plan, a monitoring or reporting service, priority access, a scheduled review, a consumables order. The test is whether the customer would notice if it stopped. Continuity is the base load that arrives in January whether or not anybody sold anything in December, and it changes who a customer rings first when a large job comes round. Start with one modest plan that customers keep.