Latest / Sales Leadership with Fexingo: Quota Carriers, Sales Managers, and Revenue Teams / How Sales Reps Can Use the Contrast Principle to Close
Transcript
- Lucas: You ever notice how something feels cheap or expensive only in relation to something else? Not in absolute terms. Luna: All the time. Like when I see a $5,000 watch next to a $10,000 watch, the first one suddenly seems reasonable. Lucas: Exactly. That's the contrast principle at work. And it is one of the most underused tools in B2B sales negotiations. Not the cheesy 'show them the expensive option first to make the middle one look good' — that's actually clumsy and buyers see through it. I'm talking about a structured, ethical application of how humans perceive value. Luna: So what's the difference between clumsy anchoring and the kind you're advocating for? Lucas: Good question. Clumsy anchoring is just dropping a high number and hoping. The smart version builds a frame of reference that helps the buyer evaluate trade-offs. There's a 2025 study from Harvard's negotiation program — they ran an experiment with procurement managers. When a supplier presented three options in descending order of price, the middle option was selected 62 percent of the time. When they presented the same three options in ascending order, the middle option only got 38 percent. Luna: So order alone shifted preference by nearly 25 percentage points. That's massive. Lucas: Huge. And it's not about trickery. It's about how the brain constructs value. We don't have an internal price meter — we compare. So as a sales rep, if you control the sequence, you're helping the buyer make a more informed decision, not a manipulated one — as long as the options are real. Luna: But let's be honest — some buyers have seen this before. Procurement teams especially. They know when you're leading with a decoy. Lucas: They do. So the key is that every option must be genuinely viable and priced fairly. The contrast works because each tier represents a real trade-off, not a fake anchor. I want to talk about a specific case — a mid-market SaaS company called Gridline Analytics. They sell project management software to teams of 50 to 500 people. Luna: I've heard of them. They had a pricing problem — their mid-tier plan was around $15 per user per month, but prospects kept comparing it to cheaper tools like Asana or Trello. Lucas: Right. So their close rate on the mid-tier was around 18 percent — low for that category. They hired a pricing consultant who did one thing: restructured how they presented the three options. Before, they led with the basic plan at $9, then mid at $15, then premium at $25. After, they led with premium at $25 — but they added a fourth option: an enterprise tier at $40 that included dedicated support and custom integrations. Luna: Wait — they added a higher tier? That's counterintuitive. Usually you want to simplify. Lucas: But the effect was dramatic. Now when the buyer sees the $25 premium, it's not the top — it's the second most expensive. And the $15 mid-tier now looks like a great value compared to $25 and $40. Within two quarters, their close rate on the mid-tier jumped from 18 percent to 41 percent. Average deal size actually increased because some buyers moved to the premium tier. Luna: So they didn't change any prices. Just the frame. Lucas: Correct. And the enterprise tier wasn't a decoy — they actually sold it to about 12 percent of new customers. It was a real option for larger teams. But its main job was to make the premium tier look reasonable and the mid-tier look affordable. Luna: That's a textbook contrast move. But what about the buyer who only needs basic functionality? They might feel pressured into a higher tier. Lucas: That's the ethical line. The trick is to make sure the basic plan is still a good product. In Gridline's case, the basic plan still had all core features — just limited storage and no integrations. And their sales reps were trained to say: 'If your team is under 30 and you don't need reporting, the basic plan is perfectly fine.' That honesty actually built trust. Luna: So the contrast helped the rep frame value, but the rep still had to be consultative. You can't just rearrange the menu and expect the waiter to disappear. Lucas: Exactly. The technique amplifies good selling — it doesn't replace it. And one reason it works is that buyers are often unsure what constitutes a fair price. A 2024 study from Stanford found that in B2B software purchases, the buyer's internal reference price — what they think is 'about right' — can vary by as much as 40 percent depending on what they saw first. Luna: Forty percent. That's the difference between a $10,000 deal and a $14,000 deal. Lucas: Exactly. So if a rep lets the buyer anchor on a low reference — maybe from a competitor's pricing page — the rep is fighting uphill. But if the rep presents a higher anchor first, within reason, the buyer's perception shifts. And I'm not saying deceive them. I'm saying: show them the full range of value before they lock into a number. Luna: Let's talk about an example where it goes wrong. A friend of mine at a cybersecurity firm tried this — led with a $200,000 enterprise package to a mid-market prospect. The prospect laughed and walked. Lucas: Right, because the anchor has to be plausible. If the buyer's budget is $50,000 and you lead with $200,000, you're not contrast-pricing — you're insulting their intelligence. The top tier should be maybe 30 to 50 percent above the target option, not 300 percent. Luna: So the anchor has to live within the same neighborhood as the buyer's reality. What about the opposite — leading with the cheapest option? Does that ever work? Lucas: Sometimes. If you're selling a commodity where price is the only differentiator, yes. But in complex B2B, leading cheap frames you as low-end. And then it's hard to upsell. I'd say 80 percent of the time, lead with the highest-value option first, then walk back. Luna: That runs counter to the old 'spreadsheet comparison' approach where you list all options side by side in random order. Lucas: It does. And spreadsheets are actually terrible for contrast because they highlight differences linearly. The brain responds better to a narrative sequence — 'Here's what full power looks like. Here's what most teams need. And here's the essentials.' That's a story, not a table. Luna: I want to push back on one thing. You said the approach works because buyers lack a reference price. But what about procurement pros who negotiate daily? They have dozens of reference points. Lucas: That's a great point. And the data shows that experienced buyers are less susceptible — but still influenced. The Harvard study I mentioned used procurement managers with an average of eight years experience. The effect was smaller — about a 12 point swing instead of 24 — but still statistically significant. No one is immune to framing. Luna: So even sophisticated buyers are human. Good. That means the technique isn't just for new reps. Lucas: Right. And there's another variant I want to mention — contrast through bundling. Instead of presenting a single price for a product, you can show the cost of buying each component separately. That creates a 'savings contrast.' For example, a CRM with marketing automation and analytics — if you list each module at $30, then bundle at $60, the bundle feels like a steal. Luna: I've seen that in SaaS pricing pages. 'Buy separately for $120, get it all for $79.' It works because the brain sees the savings, not the absolute cost. Lucas: Exactly. And the best part — it lets you discount without discounting. You're not lowering your price; you're changing the frame so the price looks lower. If you ever find yourself saying 'I can knock 10 percent off,' stop. Instead, say 'Our standard price for the full suite is $120 per user. For you, we can offer the bundle at $79.' Luna: That's a much stronger position. You're not giving away margin; you're giving a perception. Lucas: And you protect your brand's pricing integrity. Which brings me to a final point: contrast works best when the value is real. If your product doesn't deliver, no amount of framing will save you. But if you have a solid product and reasonable pricing, this technique can be the difference between a lost deal and a closed-won. Luna: I think that's a great note to land on — because some sales reps might hear this and think it's just manipulation. But the ethical boundary is clear: present real options, help the buyer see the value, and let them choose. Lucas: Exactly. And on that note — if these conversations have helped you think differently about your sales approach, we want you to know that we keep this show ad-free by choice. If you'd like to support that choice, the link is buy me a coffee dot com slash fexingo. It's a small gesture that keeps us independent. Luna: Yeah, and we appreciate every person who's chipped in. It means we can keep doing deep dives without trying to sell you anything. Lucas: Alright — back to contrast. I want to give listeners one actionable takeaway. Next time you're in a pricing conversation, write down the three options you plan to present. Then ask yourself: 'Am I leading with the one that frames the best value, or the one that's easiest to defend?' If it's the latter, reverse the order. See what happens. Luna: And track it. Measure your close rate before and after. That's the only way to know if it's working for your specific market. Lucas: Good point. And if you try it, let us know. We'd love to hear how the contrast principle plays out in your world. Luna: Alright, that's all for this episode. Thanks for listening.