What Is Tiering and Why It Adds Margin

Bill Diggons, managing partner at Qittitut Consulting (yes, named after a fast-growing, healthy Inuit bear), shares 24 years of pricing wisdom earned across 182 projects in 57 countries. A disciple of pricing legend Tom Nagle and former oil industry marketer at Schlumberger and Halliburton, Bill reveals why single-column bids are leaving 3-5 margin points on the table and how tiering transforms B2B pricing.

From Wagyu beef pricing psychology to semiconductor de-specification strategies, Bill and Mark debate whether prices should be easy or hard to compare, why "Boss Hog" beats techno-nerd names, and the counterintuitive power of ending prices in odd numbers instead of zeros. Plus, why Bill charges $5,000 extra just to read client contracts.

Why you have to check out today's podcast:

• Discover why tiering consistently delivers 3-5 margin points minimum—and how three-column bids with strategic naming force buyers to make trade-offs instead of price comparisons.
• Learn the "no zeros" pricing rule that generated $8 million in three months by making prices look carefully calculated rather than negotiable.
• Master the art of non-compliant RFP responses with alternatives that disrupt tender processes and win on value instead of lowest price.

"Not profound, but no zeros on the quote. It's so often that we can get half a margin point just out of stuff like that. And then beyond that, try some naming and tiering because it's going to work for you."

– Bill Diggons

Topics Covered:

02:09 - The Qittitut Origin Story: Why a Dancing Bear Beat "Bill & Bob's Consulting".

05:39 - What is Tiering? Moving Beyond Single-Column Bids.

10:07 - The Restaurant Menu Masterclass and Boss Hog's Emotional Appeal - How to Decide What Features Go in What Tiers.

19:02 - Responding to RFPs with Tiered Alternatives and Non-Compliant Bids.

20:02 - The Power of "Networking Best Practices Meeting" vs. "Presentation".

26:23 - Final Advice: No Zeros on the Quote (And Why It Generated $8 Million).

28:12 - Contacting Bill and Why He Charges $5,000 to Read Contracts.

Key Takeaways:

"Tiering to me is having at least a three-column bid, naming the columns, and then having some names on the products or services to imply added value. Whenever we've introduced this, it always results in three to five margin points minimum." - Bill Diggons

"I demand the right to segment that price to the outcome, the value the buyer gets. Even though the variable cost of the motor is identical, I want to be able to sell it at an economy price in a benign environment and at a premium price in an extreme environment because I put billions of dollars into creating this thing." - Bill Diggons

People / Resources Mentioned:

• Tom Nagle: Author of "Strategy and Tactics of Pricing" - pricing authority who transformed Bill's approach in oil and gas.
• Schlumberger: Oil company where Bill worked in marketing.
• Halliburton: Oil company in Bill's background.
• QSales: Where Bill was practice leader for 20 years.
• A.T. Kearney, McKinsey, Deloitte: Consulting firms mentioned in the RFP rejection story where Bill's price was "too low".
• Starbucks: Referenced for tall, grande, venti tiering strategy.
• iPhone/Apple: Used as two examples - 99-cent pricing psychology AND customers not comparing to Huawei when upgrading.
• Huawei: Mentioned as iPhone competitor that iPhone users ignore when upgrading.

Connect with Bill Diggons:

• Company: https://www.qittitut.com/
• Linkedin: https://www.linkedin.com/in/billdiggons/
• Email: bill@qittitut.com

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: mark@impactpricing.com