The L.A.D.D.E.R. Pricing Model

How to Price Your Products & Services

🔹 Introduction

Pricing your products or services correctly can make or break your business. The L.A.D.D.E.R. Pricing Model helps you create a pricing structure that attracts customers, maximizes revenue, and positions your business for long-term success.

🔹 What Is the L.A.D.D.E.R. Pricing Model?

The L.A.D.D.E.R. Model consists of six key elements to structure your pricing effectively:

✅ L – Low-Barrier Offer (Attract customers with an easy entry point)
✅ A – Anchor Price (Set a reference price that makes other options look valuable)
✅ D – Different Tiers (Offer multiple pricing options to suit different budgets)
✅ D – Deliver Value (Ensure your pricing reflects the value provided)
✅ E – Emphasize ROI (Show customers the return on their investment)
✅ R – Recurring Revenue (Create pricing models that generate consistent income)

Let’s explore each step in detail.

1️⃣ L – Low-Barrier Offer: Attract Customers with an Easy Entry Point

A low-cost or free initial offer reduces resistance and gets potential customers in the door.

How to Create a Low-Barrier Offer:

Offer a free trial or a low-cost starter package.
Provide a high-value lead magnet (free ebook, mini-course, consultation).
Make it risk-free (money-back guarantee, no-obligation trial).

Example: A software company offers a 14-day free trial with full functionality to encourage sign-ups.

Action Step: Develop a low-risk, high-value offer to attract customers.

2️⃣ A – Anchor Price: Set a High Reference Point

Anchoring is a psychological pricing strategy where you present a higher-priced option first, making the other options look more affordable.

How to Use Price Anchoring:

Display your premium or high-end package first.
Use “Was $X, Now $Y” comparisons.
Show competitors’ pricing to highlight your value.

Example: A coaching program lists a $5,000 VIP package before showing a $1,500 mid-tier option, making the latter seem like a bargain.

Action Step: Identify your anchor price and use it to frame your other offerings.

3️⃣ D – Different Tiers: Offer Multiple Pricing Options

Giving customers choices increases conversions and allows them to pick an option that fits their budget.

How to Structure Pricing Tiers:

Offer at least three pricing levels (Basic, Standard, Premium).
Clearly differentiate features and benefits of each tier.
Use price psychology (charm pricing, bundles, decoy pricing).

Example: A marketing agency offers three packages: $500 (DIY), $2,000 (Done-With-You), and $5,000 (Done-For-You).

Action Step: Develop at least three pricing tiers for your product or service.

4️⃣ D – Deliver Value: Price Based on Perceived Benefits

Customers pay for results, not just time or features.

How to Ensure Pricing Reflects Value:

Highlight the transformation or outcome customers get.
Use testimonials and case studies to justify pricing.
Compare the cost of inaction (how much they lose by not buying).

Example: A personal finance course costs $1,000 but teaches strategies to save or earn $10,000 within a year.

Action Step: Clearly communicate the value customers get relative to the price.

5️⃣ E – Emphasize ROI: Justify the Price with Measurable Benefits

People buy when they see a clear return on investment (ROI).

How to Show ROI:

Use real numbers (e.g., “Save $500/month,” “Increase sales by 30%”).
Offer guarantees that reinforce results.
Highlight long-term benefits over short-term costs.

Example: A productivity tool costs $50/month but claims to save users 10+ hours per week, equating to thousands in saved labor costs.

Action Step: Identify at least one strong ROI point to justify your pricing.

6️⃣ R – Recurring Revenue: Create Consistent Income Streams

Subscription and membership models generate stable, predictable revenue.

How to Implement Recurring Revenue:

Offer monthly or annual subscription plans.
Create a membership with exclusive content or services.
Provide ongoing support, maintenance, or upgrades.

Example: A graphic design agency offers a $199/month unlimited design subscription instead of one-off projects.

Action Step: Explore ways to add recurring revenue options to your business.

🔹 Quick Takeaways (Summary)

✅ L – Low-Barrier Offer: Start with a low-risk, high-value offer to attract customers.
✅ A – Anchor Price: Use high-value pricing as a reference to make other offers seem reasonable.
✅ D – Different Tiers: Provide multiple pricing options to cater to different budgets.
✅ D – Deliver Value: Price based on results and transformation, not just features.
✅ E – Emphasize ROI: Show measurable benefits and long-term value.
✅ R – Recurring Revenue: Implement subscriptions or memberships for stable income.