The Tiered Pricing Trap & What I’m Watching for with OpenAI Ads

🌿 Life Lately

48 days until I meet this baby, and I’m learning that making strategic choices means knowing what you want before someone else decides for you.. Last week, I ended up at Labor & Delivery for what turned out to be completely unnecessary because all I needed was some simple swab testing. Baby and I are fine, but the experience reinforced why I chose a birthing center for this second baby (I’ll share more about that in another post).

More or less, I didn’t feel heard, I had to advocate hard just to get a specific antibiotic, and I could just hear the bill climb (with my crappy insurance) as they wheeled me to the fourth floor for a simple swab test. The whole thing made me think about how often we let systems make decisions for us instead of speaking up for what we actually need. That applies to healthcare, in this case, but also to how we price our services, when we adopt new tools like AI, and what trends we chase in our businesses.

🤖 A Bit of AI

OpenAI just announced they’re introducing ads to ChatGPT. I knew this was coming the same way I knew it would eventually hit Pinterest years ago. It starts small and not particularly invasive, but it will gradually become more aggressive as advertisers figure out what works.. and the big players come to play. You can listen to this episode for more insight, too.

Here’s what I’m watching for: how quickly this becomes difficult for smaller businesses to compete in. Right now, there’s an early adopter opportunity before those big players pile on, and something I’m very much thinking about testing out.

I actually talked about this on the AI Queens podcast recently. Using AI to search for products, reviews, and insight is genuinely better than randomly finding things on social media. It’s like Pinterest but EVEN MORE specific. People go to ChatGPT, Gemini, Claude, etc., looking for or researching something very specific, and with AI, it can actually pull detailed information about your brand, product, or service to help them make a choice. That could be HUGE for us.

The strategic question is whether you get in now while it’s still forming, or wait to see how invasive (and expensive) it becomes. I’m leaning toward testing it early, but I’m also trying to be realistic about the trajectory here ;)

💭 Business Thoughts

The Tiered Pricing Decision

I’ve been reading about how tiered pricing is becoming the default for everything from flights to streaming services to SaaS tools. As you might know, big corps can analyze your browsing data, social use, and purchase history to figure out your “max spend” and use a pricing scale to set your price accordingly. It’s crazy, but that does make sense why our flight costs change so much between people.

For us, small business owners, there’s a version of this we could potentially use too, and staying hopeful that analytics and AI can help us in the future to accomplish this. For now, we should look at how past customers buy and what they’re willing to spend, then cross-reference that with industry data to help us set realistic pricing and set tiers.

I’ve seen this work in my own business. My semi-custom brand packages and lite website templates convert well because I’m offering the same high-quality work at a lower price point, just with fewer deliverables. Same core product, different scope.. because I saw the shift in the industry and the need.

But there are “traps” to think about:

1. Questioning the Price: You keep adding lower tiers to capture more customers, and eventually, you train your audience that the “real price” is always cheaper if they just wait or ask for a discount. You’re competing with yourself and this is something I’m constantly trying to keep in mind.

Subscribe to my Substack to Read More!