Lately I’ve been noticing a trend that’s winning everywhere - from $5 bagel shops to billion-dollar insurance carriers:
Present the cheapest option first… then upsell your way to higher revenue.
I was recently at their airport for an early morning 5 hour flight. Obviously I was going to stop at the bagel sandwich shop to get a sandwich and coffee before I boarded.
When I got to the front and picked the bagel sandwich I wanted, I saw that prices were for 1 egg on the sandwich - but obviously I wanted 2 (because protein). And with my flight boarding in 10 minutes, they could have charged me whatever for that second egg.
Car dealerships do it with trim levels
SaaS companies do it with “Basic” → “Pro”
And in insurance - where I learned this in depth - this strategy is a backbone of the entire industry right now.
It feels counterintuitive.
It freaks Sales out because they think, “We’re leading with our weakest offer - we’re going to lose deals!”
But in practice this consistently produces more revenue.
Let’s break down why…
The Car Insurance Example (The Cleanest Version of This Strategy)
When you get an auto insurance quote, the system always shows you the lowest possible premium:
lowest liability limits
highest deductibles
minimal add-ons
bare-bones coverage
Why?
Because this baseline creates the anchor. It’s what you compare across brands and gets stuck in your mind.
Then the agent walks you up the ladder:
“Here’s what better coverage looks like…”
“Here’s the risk you’re exposed to at those limits…”
“Here’s how little it costs to double protection…”
“Here’s why a higher deductible is a terrible idea if you ever need to file a claim…”
The delta starts to feel small.
A $32/month increase feels tiny compared to the downside of a $100K at-fault accident.
A $12/month add-on feels trivial next to towing costs.
$9/month for rental coverage feels like common sense.
Customers believe they’re choosing the right protection for their situation.
But in reality, the decision architecture did the heavy lifting.
The “cheap” option was never meant to be chosen.
It was meant to make the real offer look obvious.
The strategy works because human psychology works.
What You Should Do With This Insight
1. Audit how your company presents pricing.
Are you forcing customers to interpret value, or is value revealed through contrast?
2. Build a Good → Better → Best structure with a clear narrative.
The “Good” version should be intentionally limited - not deceptive, but incomplete - so the “Better” version feels right.
A good example of this is “80% of our customers are on the Better version because of xyz feature”.
4. Ensure Sales is aligned to this strategy
Where this strategy falls apart is when marketing and finance set up the pricing structure, but then sales isn’t incentivized to help customers climb the ladder.
You don’t want to be stuck with lower-margin smaller packages. Create large incentives for Sales to sell the large packages.
The Punchline
If you want more revenue, don’t start by raising prices.
Start by engineering a path that makes your premium offer the easy choice.
How we can help:
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Brett Hampson, Founder of Forecasting Performance
