Articles from March 2025

Before I make a purchase, I do my homework. How many companies are selling what I want, and at what price? My goal is to balance cost and quality — if a brand offers the best of both worlds, I’m sold.

But how do companies find the sweet spot for sales? With more than 80% of consumers now comparing prices, you’ve got to get it right. Set prices too high, and you risk losing sales. Set them too low, and you lose out on revenue.

While there’s no hard-and-fast rule to find optimal price points, the process doesn’t have to be a gamble. To help your business navigate evolving customer expectations, I’ve created the ultimate guide to pricing strategies and models. Let’s dive in.

Table of Contents

• Pricing Strategy
• Pricing Analysis
• Types of Pricing Strategies
• Pricing Strategy Examples
• Cost, Margin, & Markup in Pricing
• How to Create a Pricing Strategy
• Pricing Models
• Pricing Models Based on Industry or Business

Key components of pricing strategies include:

• Revenue goals
• Marketing objectives
• Target audience
• Brand positioning
• Product attribute.

Strategies are also influenced by external factors like consumer demand, competitor pricing, and overall market trends.

Before I talk about pricing strategies, let’s review an important pricing concept that will apply regardless of what strategies you use.

Price Elasticity of Demand

Price elasticity of demand determines how a change in price affects consumer demand.

If consumers still purchase a product despite a price increase, its demand is inelastic. Fuel is a good example. I rely on my car to get me from point A to point B, and my car needs fuel to run. Even when gas gets more expensive, I pay the price.

If price changes significantly impact purchasing decisions, demand is elastic. Consider streaming TV and movie services — more than half of consumers say they’ve canceled a streaming service due to price hikes.

Unitary elastic demand occurs when the percentage change in quantity demanded is exactly equal to the percentage change in price.

You can calculate price elasticity using this formula:

% Change in Quantity ÷ % Change in Price = Price Elasticity of Demand

The concept of price elasticity helps you understand whether your product or service is sensitive to price fluctuations and to what degree.

You typically conduct a pricing analysis when considering new product ideas, developing your positioning strategy, or running marketing tests. I’d also recommend running a price analysis once every year to evaluate your pricing against market competitors and consumer expectations.

How to Conduct a Pricing Analysis

Here’s a step-by-step guide to help you through the price analysis process.

1. Determine the true cost of your product or service.

To calculate the true cost of a product or service, first calculate all your expenses, including fixed and variable costs. Rental or lease payments, insurance, and property taxes are examples of fixed costs. Variable costs include materials, labor, and logistics.

Once you’ve determined these costs, subtract them from the price of your product or service.

True cost = Sales price – (fixed + variable costs)

For example, if the sales price of your product is $10, your fixed costs are $5, and your variable costs are (currently) $3, your total cost is $2. This means you make $2 for every product sold. If, however, your fixed costs are $7 and your variable costs are $4, you’re losing a dollar on every sale.

2. Understand how your target market and customer base.

In my experience, surveys, focus groups, or questionnaires can help determine how the market responds to your pricing model. You get a glimpse into what your target customers value and how much they’re willing to pay for the value your product or service provides.

3. Analyze competitor prices.

There are two types of competitors to consider when conducting a pricing analysis: direct and indirect.

Direct competitors sell the exact same product that you sell. These types of competitors are likely to compete on price, so they should be a priority to review in your pricing analysis.

Indirect competitors are those who sell alternative products that are comparable to what you sell. If a customer is looking for your product but it’s out of stock or out of their price range, they may go to an indirect competitor to get a similar product.

I suggest creating a competitive analysis chart to visualize how your pricing compares to competitors and identify any gaps or opportunities.

4. Review any legal or ethical constraints to cost and price.

There’s a fine line between competing on price and falling into legal and ethical trouble. For example, you need to understand price-fixing and predatory pricing.

Pricing fixing happens when multiple companies collaborate to set the price of identical items, in turn eliminating competition. Predatory pricing occurs when one company sets unrealistically low price points for products to corner the market. Both practices violate American antitrust laws.

Cost, Margin, & Markup in Pricing

Understanding the role of cost, margin, and markup is also essential when choosing a pricing strategy, especially if you want your pricing to be cost-based.

Cost

Cost refers to the fees you incur from manufacturing, sourcing, or creating the product you sell. They include materials, the cost of labor, fees paid to suppliers, and any losses incurred. Cost does not include overhead and operational expenses such as marketing, advertising, maintenance, or bills.

Margin

Margin, also called profit margin, is the difference between the selling price of a product and its cost, expressed as a percentage of the selling price. It shows you the profitability of your product.

There are two types of margins:

• Gross margin. This is calculated as (Sales Price – Cost of Goods Sold) / Sales Price x 100. It reflects the profitability before accounting for operating expenses.
• Net margin. This is calculated as (Net Profit / Sales Price) x 100. It includes all expenses, providing a more comprehensive view of profitability.

Consider a product sold for $120 that costs $70 to produce:

Gross Margin = (120 − 70​) / 120 x 100 = 41.6%

To calculate net profit, subtract any additional expenses from your gross profit, such as operating costs or taxes. In the example above, our gross profit is $50 (120 – 70). If operating costs are $20 and taxes are $10, our net profit is $40. (70 – 20 -10). Now, we can calculate our net margin.

Net Margin = (40 / 120) x 100 = 33.3%

Markup

Markup refers to the additional amount you charge for your product over the production and manufacturing fees. It allows you to set prices that align with market expectations and your business goals.

For example, if a product costs $70 to produce and you sell it for $100, the markup is $30, or approximately 42.9% of the cost price.

Now, I’ll walk you through some common pricing strategies. It’’s important to note that these aren’t necessarily standalone strategies — many can be combined when setting prices for your products and services.

1. Competition-Based Pricing Strategy

Competition-based pricing is also known as competitive pricing or competitor-based pricing. This pricing strategy focuses on a company‘s product or service’s existing market rate (or going rate). It doesn’t consider the cost of its product or consumer demand.

Instead, a competition-based pricing strategy uses the competitors’ prices as a benchmark. Businesses that compete in a highly saturated space may choose this strategy since a slight price difference may be the deciding factor for customers.

With competition-based pricing, you can price your products slightly below your competition, the same as your competition, or slightly above your competition.

For example, if I sell marketing automation software, and my competitors’ prices range from $19.99 per month to $29.99 per month, I could set my price at $18.99 on the low end, $30.99 on the high end, or $24.99 if I want to stay in the middle.

I think a great example of a competitive pricing model is Amazon. The company uses automated repricing tools that constantly monitor competitor prices and adjust their prices accordingly. This strategy ensures Amazon’s prices are always competitive, often making them the lowest-priced option in the market.

When to use: Use competition-based strategies to capture consumer attention in saturated markets.

Competition-Based Pricing Strategy in Marketing

The approach has helped Amazon attract price-sensitive customers and maintain its ecommerce dominance. Consumers seek the best value, which isn’t always the lowest price. Competitive pricing can help your brand attract customers, especially if your marketing teams can offer something unique like exceptional customer service, a generous return policy, or exclusive loyalty benefits.

2. Cost-Plus Pricing Strategy

A cost-plus pricing strategy (also known as markup pricing) focuses solely on the cost of producing your product or service or your cost of goods sold (COGS).

To apply the cost-plus method, you add a fixed percentage to your product production cost.

The formula is:

Selling Price = Cost Price x (Cost Price + Markup Percentage)

For example, let’s say you sell shoes. The total cost to produce one pair of shoes is $55. If you want to apply a 50% markup, the calculation would be:

Selling Price = $55 × (1 + 0.50) = $55 × 1.50 = $82.50

Cost-plus pricing is typically used by retailers who sell physical products. This strategy isn’t the best fit for service-based or SaaS companies as their products typically offer far greater value than the cost to create them.

When to use: Use cost-plus pricing when your competition is using the same model.

Cost-Plus Pricing Strategy in Marketing

If you’re using a cost-plus approach, focus on marketing the value of your goods compared to competitors, not the price. For example, your product might include features or add-ons that other brands do not.

3. Dynamic Pricing Strategy

Dynamic pricing strategy is also known as surge pricing, demand pricing, or time-based pricing. It involves adjusting prices in real time based on factors such as market demand, competitor prices, and other external conditions.

In my experience, this flexible approach helps maximize revenue and maintain competitiveness.

Hotels, airlines, event venues, and utility companies use dynamic pricing by applying algorithms that consider competitor pricing, demand, and other relevant factors. These algorithms allow companies to shift prices to match what the customer is willing to pay at the exact moment they’re ready to make a purchase.

There is no single formula for dynamic pricing as it involves complex algorithms, but a basic version can be represented as:

Selling Price = Base Price + (Demand Factor × Base Price)

Let’s say your product costs $20. Research shows that consumer demand is up 30%.

Selling Price = 20 + (0.30 x 20) = 20 + 6 = $26.

A great example of a company that uses a dynamic pricing model is Uber. During peak hours or high-demand situations (e.g., Friday nights, bad weather), Uber’s algorithms monitor the number of ride requests, and if the demand exceeds the supply of available drivers, it temporarily increases the ride prices.

When to use: Use dynamic pricing when your product or service is in high demand, and when there aren’t many viable competitors operating in the same space.

Dynamic Pricing Strategy in Marketing

Dynamic pricing can help keep your marketing plans on track. Your team can plan for promotions in advance and configure the pricing algorithm you use to launch the promotion price at the perfect time. You can even A/B test dynamic pricing in real time to maximize your profits.

4. High-Low Pricing Strategy

A high-low pricing strategy starts with high product sales prices that fall when the product loses novelty or relevance.

Discounts, clearance sections, and year-end sales are examples of high-low pricing in action, which is why this strategy may also be called a discount pricing strategy.

This approach aims to capture different segments of the market, starting with customers willing to pay a premium and later attracting more price-sensitive shoppers as the price drops.

High-low pricing is commonly used by retail firms that sell seasonal items or products that change often, such as clothing, decor, and furniture.

For example, in 2023, Nike used the high-low pricing strategy for its Court Legacy sneaker. Initially, the shoe was sold at a high price to attract customers eager for the latest release.

As demand decreased and new models came out, Nike lowered the price through promotions and discounts. This strategy helped Nike manage inventory and attract a broader customer base, including price-sensitive shoppers who waited for discounts. Now, the shoe is no longer sold by Nike directly but can be found on reseller websites for a lower price.

When to use: Use high-low pricing for products with high initial demand, such as special editions or limited-time offers. As demand falls, lower the price accordingly.

High-Low Pricing Strategy in Marketing

If you want to keep the foot traffic steady in your stores year-round, a high-low pricing strategy can help. By evaluating the popularity of your products during particular periods throughout the year, you can leverage low pricing to increase sales during traditionally slow months.

5. Penetration Pricing Strategy

Penetration pricing strategy involves setting a low initial price for a new product to attract customers and gain market share quickly. Once the product gains traction, the price is gradually increased.

In my experience, this pricing method works best for brand-new businesses looking for customers or for businesses that are breaking into an existing, competitive market. The goal is to entice customers away from competitors and build a substantial customer base, with the expectation that customers will remain loyal even after prices are increased.

However, penetration pricing isn’t sustainable in the long run. It’s typically applied for a short time.

For example, when Disney+ launched its streaming service, it offered subscriptions at a lower price compared to competitors like Netflix and Amazon Prime. This initial low price attracted millions of subscribers quickly.

After building a strong subscriber base, Disney+ began increasing its subscription price in 2022. By early 2023, subscriber numbers began to drop, and have remained reliability stable since.

When to use: Use penetration pricing when your brand is just getting started. Conduct customer research to determine when you should raise prices and by how much.

Penetration Pricing Strategy in Marketing

Penetration pricing, like freemium pricing, means you won’t make money immediately. However, with a valuable product or service, you can increase prices over time and grow your business. Focus on marketing the value of your products, making price a secondary consideration.

6. Skimming Pricing Strategy

A skimming pricing strategy involves setting a high initial price for a new or innovative product to maximize revenue from early adopters. Over time, the price is gradually lowered to attract more price-sensitive customers.

Skimming is different from high-low pricing in that prices are gradually lowered over time.

Apple uses the skimming pricing strategy effectively. When they launch a new iPhone, it is priced at a premium to target customers willing to pay more for the latest technology and features.

As newer models are introduced and initial demand decreases, Apple gradually reduces the price of the previous model. This approach helps them maximize revenue from early adopters and then attract more price-sensitive customers over time.

A skimming pricing strategy helps recover sunk costs and sell products well beyond their novelty. It’s worth noting, however, that this strategy can also annoy consumers who bought at full price and attract competitors who recognize the “fake” pricing margin as prices are lowered.

When to use: Use skimming when you have high demand for a product and when the type of product you are selling has proven value retention over time.

Skimming Pricing Strategy in Marketing

Skimming pricing works well for products with different life cycle lengths. For products with a short life cycle, you can quickly maximize profits at the start. For those with longer life cycles, you can maintain higher prices for a longer period. This strategy allows you to manage marketing efforts effectively without constantly adjusting prices.

7. Value-Based Pricing Strategy

Value-based pricing is a strategy where prices are set based on the perceived value of the product or service to the customer rather than on the cost of production or historical prices.

This approach aims to maximize revenue by aligning the price with the value customers place on the offering.

If used accurately, value-based pricing can boost your customer sentiment and loyalty. I think it can also help you prioritize your customers in other facets of your business, like marketing and service.

Tesla uses a value-based pricing strategy for its electric vehicles (EVs). This pricing reflects the perceived value of their innovative technology, sustainability, and brand prestige.

For example, the Tesla Model S is priced higher than many other EVs and luxury cars due to its high performance and advanced features. Customers are willing to pay a premium for Tesla‘s cutting-edge technology and the brand’s reputation for innovation and environmental responsibility.

When to use: Use a value-based pricing strategy when you can clearly articulate what sets your product or service apart from the competition.

Value-Based Pricing Strategy in Marketing

When marketing to customers, I recommend focusing on value to strengthen demand for your products and services. Ensure your pricing reflects what different audiences are willing to pay without using criteria that could cause issues.

8. Psychological Pricing Strategy

Psychological pricing is what it sounds like — it targets human psychology to boost your sales.

Consider the 9-digit effect. While a product that costs $99.99 is essentially $100, the one-cent change tricks our brains into thinking the price is significantly cheaper.

Another way to use psychological pricing would be to place a more expensive item directly next to (either in-store or online) the one you’re most focused on selling. Or offer a “buy one, get one 50% off (or free)” deal that makes customers feel the circumstances are too good to pass up.

One of my favorite methods is also the simplest: Changing the font, size, or color of product pricing information can help boost sales.

Psychological Pricing Strategy in Marketing

Psychological pricing requires a deep understanding of your target market to be effective. If your customers value discounts and coupons, emphasize these in your marketing to meet their desire to save money.

On the other hand, if quality is more important to your audience, the lowest price might not attract them. Your pricing and marketing should align with what motivates your customers to pay a certain price for a product.

When to use: Use this strategy in conjunction with any other strategy to improve overall sales.

9. Geographic Pricing Strategy

Geographic pricing strategy involves setting different prices for products or services based on the geographic location of the customer.

This strategy may be used if a customer from another country is making a purchase or if there are disparities in factors like the economy or wages.

For example, Netflix uses geographic pricing to adjust subscription fees based on the region. A standard Netflix subscription costs $17.99 per month in the United States but ₹ $499 per month (about $5.71) in India to account for differences in purchasing power and local market competition.

When to use: Use this strategy when you sell the same product or service in multiple geographic markets.

Geographic Pricing Strategy in Marketing

Marketing a geographically priced product is easy with paid social media ads. You can target specific zip codes, cities, or regions at a low cost with precise results. Even if customers travel or move, your pricing model stays consistent, helping you manage marketing costs.

Pricing models can be hard to visualize. Below, we’ve pulled together a list of examples of pricing strategies as they’ve been applied to everyday situations or businesses.

1. Dynamic Pricing Strategy: Chicago Cubs

Source

Finding tickets to a Cubs game is interesting because every time I check prices, they’ve fluctuated a bit from the last time. Purchasing tickets six weeks in advance is always a different process than purchasing them six days prior — and even more box pricing at the gate.

This is an example of dynamic pricing — pricing that varies based on market and customer demand. Prices for Cubs games are always more expensive on holidays, too, when more people are visiting the city and are likely to go to a game.

Best for: Time-sensitive events, sales, or promotions are great opportunities for implementing dynamic pricing.

2. Freemium Pricing Strategy: HubSpot

Source

HubSpot is an example of freemium pricing at work. We offer a free version of the CRM for scaling businesses as well as paid plans for businesses using the CRM platform that need a wider range of features.

Moreover, within those marketing tools, HubSpot provides limited access to specific features. This type of pricing strategy allows customers to acquaint themselves with HubSpot and for HubSpot to establish trust with customers before asking them to pay for additional access.

What I like: Freemium pricing works super well for digital products because it gives customers a taste of the value you offer before committing.

3. Penetration Pricing Strategy: Netflix

Source

Netflix is a classic example of penetration pricing: entering the market at a low price (remember when it was $7.99?) and increasing prices over time. Since I joined a couple of years ago, I’ve seen a few price increase notices come through my inbox.

Despite their increases, Netflix continues to retain — and gain — customers. Sure, Netflix only increases their subscription fee by $1 or $2 each time, but they do so consistently. Who knows what the fees will be in five or ten years?

Pro tip: If you go with penetration pricing, be sure to be transparent about when the lower pricing changes so customers don’t churn as soon as you up the price on them. Also, be sure the value you provide is worth the higher price to customers.

4. Premium Pricing: AWAY

Source

There are lots of examples of premium pricing strategies … Rolex, Tesla, Nike — you name it. One that I thought of immediately was AWAY luggage.

Does luggage need to be almost $500? I’d say no, especially since I recently purchased a two-piece Samsonite set for one-third the cost. However, AWAY has still been very successful even though they charge a high price for their luggage. This is because when you purchase AWAY, you’re purchasing an experience. The unique branding and the image AWAY portrays for customers make the value of the luggage match the purchase price.

Best for: Premium pricing is best for premium products or services, so be sure your value suits your price.

5. Competitive Pricing Strategy: Shopify

Source

Shopify is an ecommerce platform that helps businesses manage their stores and sell their products online. Shopify — which integrates with HubSpot — has a competitive pricing strategy.

Shopify offers four versions of its product for customers to choose from, and it offers customizable and flexible features.

What I like: With these extensive options tailored to any ecommerce business’s needs, the cost of Shopify is highly competitive and is often the same as or lower than other ecommerce platforms on the market today.

6. Project-Based Pricing Strategy: White Label Agency

Anyone who’s been involved in building a website knows how complex and costly it can be. When I needed a new website for my business, I found that the project-based fees offered by White Label Agency were the easiest to manage.

Source

This approach focuses on the value of the outcome (e.g., a fully functional, custom-designed website) rather than the time spent on individual tasks.

What I like: Project-based pricing allows White Label Agency to provide clear, upfront pricing to their clients, ensuring transparency and trust. This strategy helps them manage project scope effectively, focus on delivering high-quality work, and maintain profitability.

7. Value-Based Pricing Strategy: INBOUND

Source

While INBOUND doesn’t leave the ultimate ticket price up to its attendees, it does provide a range of tickets from which customers can choose. This allows you to choose what experience you want to have based on how they value the event.

INBOUND tickets change with time, however, meaning this pricing strategy could also be considered dynamic (like the Cubs example above). As the INBOUND event gets closer, tickets tend to rise in price.

What I like: The two ticket options — general admission and VIP — allow customers to choose the experience they are willing to pay for.

8. Bundle Pricing: Adobe Creative Cloud

Source

I like bundle pricing, especially for big projects. When building my website, I found Adobe Creative Cloud’s bundle pricing perfect. This strategy offers a suite of tools at a single price, making it more manageable and cost-effective.

Adobe Creative Cloud effectively combines multiple services into one package to enhance its value proposition and simplify purchasing decisions.

Best for: Businesses that offer a variety of related products/services can benefit from bundling to upsell and cross-sell their customers.

9. Geographic Pricing: Gasoline

Gasoline is notorious for having a wide range of prices around the world, but even within the United States, prices can vary by several dollars depending on the state you live in.

In California, for example, gas costs around $4.50 per gallon. Gas prices in Indiana, meanwhile, are just under $3.00 per gallon. State laws, environmental factors, and production costs all influence the price of gasoline, which causes this geographic disparity in price.

Pro tip: If you sell in multiple regions, be mindful of different factors that could affect the local markets and modify your prices accordingly.

How to Create a Pricing Strategy

Step 1: Evaluate pricing potential.

To create a pricing strategy, you need to understand your product’s unique selling points (USPs).

These are the features or benefits that make your product stand out from competitors. Identifying and articulating these USPs helps in justifying a higher price point.

Next, gauge customer perception of your USPs. Conduct surveys, focus groups, or interviews to learn how potential customers perceive the value of your product or service.

Understand what features they value the most and how much they are willing to pay for them. This information is crucial in setting a price that aligns with customer expectations.

Finally, assess market demand. I recommend using market research tools to analyze the demand for your product. Look at trends, market size, and growth potential. High demand can often support higher pricing, while lower demand might require competitive pricing to attract customers.

Step 2: Research your target market.

Understanding your target market is essential for setting the right price. Research potential customers’ age, gender, income level, and other relevant characteristics. Understanding these characteristics helps tailor your pricing to their financial capabilities and preferences.

In my experience, knowing what motivates your customers and their buying behaviors can provide insights into how much they are willing to spend and what they value most in a product or service.

Once you have enough data, divide your market into segments based on demographics, psychographics, and behaviors. This will help you tailor your pricing strategy to your market needs.

Step 3: Research competitor pricing.

Understanding how competitors price their products helps you make informed decisions to enhance competitiveness and profitability.

You’ll have to decide between two main choices when you see the price difference for the same product or service:

• Beat your competitors’ prices. If a competitor is charging more for the same offering as your brand, then make the price more affordable.
• Beat your competitors’ value. Also known as value-based pricing, you can potentially price your offering higher than your competitors if the value provided to the customer is greater.

To see the competition’s full product or service offering, conduct a full competitive analysis. Collect data on their pricing structures, including base prices, discounts, and special offers. Analyze the value they provide at these prices, such as product quality, customer service, and additional features.

Compare this with your offerings to understand your position. This will help you to identify gaps or opportunities to differentiate your pricing.

Step 4: Analyze historical data.

Analyzing historical data provides insights into past performance and helps predict future trends.

Start by reviewing your sales data to identify patterns, such as peak selling periods and successful price points.

Also, assess how market changes, like economic shifts or new competitors, have impacted sales. This historical perspective allows you to make data-driven decisions, anticipate customer reactions, and adjust prices strategically.

Step 5: Strike a balance between value and business goals.

A winning pricing strategy is all about balance. Focus too much on customer expectations and you may under-price your products or services. Go all-in on making a profit and you may miss the mark on keeping customers happy.

The ideal pricing strategy should help you achieve at least two of these objectives simultaneously:

• Increased profitability.
• Improved cash flow.
• Enhanced market penetration.
• Expanded market share.
• Increased lead conversion.

Step 6: Choose a pricing strategy.

After carefully considering all the factors discussed, it’s time to select the optimal pricing model for your business. The ideal strategy should:

• Accurately reflect the value you deliver to customers.
• Help you achieve your revenue goals.
• Maintain competitiveness in the market.
• Align with your overall business strategy and positioning.
• Support your long-term objectives.

Remember that pricing is not a one-time decision. Stay flexible and be prepared to make adjustments as market conditions shift and customer perceptions change over time.

Step 7: Test and refine.

Your pricing strategy should be flexible. I recommend regularly reviewing and refining it through continuous experimentation and A/B testing.

For instance, you can test different price points over a set period to evaluate their impact on sales and profitability. This way, you can make data-driven adjustments to optimize your pricing strategy.

This will ensure it remains effective and aligned with both market conditions and customer expectations.

Pricing Models

While your company’s pricing strategy may determine how you set prices for offerings overall, pricing models help you implement the broader strategy.

Below, I will take you through some popular pricing models:

1. Freemium Pricing

A combination of the words “free” and “premium,” freemium pricing is when companies offer a basic version of their product, hoping that users will eventually pay to upgrade or access more features.

Freemium pricing is commonly used by SaaS and other software companies. They choose this model because free trials and limited memberships offer a peek into a software’s full functionality — and also build trust with a potential customer before purchase.

With freemium, a company’s prices must be a function of the perceived value of their products.

For example, companies that offer a free version of their software can’t ask users to pay $100 to transition to the paid version. Prices must present a low barrier to entry and grow incrementally as customers are offered more features and benefits.

An example of a brand using this model is Dropbox. It attracts a large user base and builds brand awareness through its robust free tier. As users grow increasingly reliant on the service and need additional storage or features, their likelihood of upgrading to paid plans increases.

When to use: Use freemium pricing for services or as-a-service products that benefit from a “try before you buy” approach to creating customer interest.

Freemium Pricing in Marketing

Freemium pricing may not make your business a lot of money on the initial acquisition of a customer, but it gives you access to the customer, which is just as valuable. With access to their email inboxes, phone numbers, and any other contact information you gather in exchange for the free product, you can nurture the customer into a brand-loyal advocate with a worthwhile LTV.

2. Premium Pricing

Premium pricing, also known as prestige pricing or luxury pricing, is a strategy where a product is priced higher than competitors to create an impression of superior quality and exclusivity.

This model leverages the perception that higher prices signify better quality, drawing in consumers who are willing to pay more for what they see as a premium product or service. The strategy involves marketing the product as having limited availability or unique features that competitors cannot easily replicate.

Prestige pricing is a direct function of brand awareness and brand perception. Brands that apply this pricing method are known for providing value and status through their products — which is why they’re priced higher than other competitors.

For example, Rolex sets its prices much higher than other watchmakers. It relies on a strong reputation for exceptional craftsmanship and exclusivity. Rolex’s brand image and perceived quality attract customers who value prestige and superior workmanship.

When to use: Use a premium pricing model when you have the brand perception to back it up. In practice, this means carrying out in-depth consumer research before raising prices — if you miss the mark on customers’ perception of your brand, your higher prices will fall flat.

Premium Pricing in Marketing

Premium pricing is quite dependent upon the perception of your product within the market. There are a few ways to market your product in order to influence a premium perception of it including using influencers, controlling supply, and driving up demand.

3. Hourly Pricing

Hourly pricing, also known as rate-based pricing, is commonly used by consultants, freelancers, contractors, and other individuals or laborers who provide business services.

Hourly pricing is essentially trading time for money. Some clients are hesitant to honor this pricing strategy as it can reward labor instead of efficiency.

When to use: Use hourly pricing if you regularly take on short-term projects that let customers access your services on-demand.

Hourly Pricing in Marketing

For businesses that handle quick, high-volume projects, hourly pricing can incentivize customers to choose your services. Breaking down prices into hourly chunks allows customers to decide based on a lower price point, rather than needing to allocate a larger budget for an expensive project-based commitment.

4. Bundle Pricing

Bundle pricing is when you offer (or “bundle”) two or more complementary products or services together and sell them for a single price. You may choose to sell your bundled products or services only as part of a bundle or sell them as both components of bundles and individual products.

For example, Amazon frequently offers bundle deals where customers can buy related items together at a discount. Customers might buy a camera with accessories like lenses, tripods, and memory cards at a bundled price.

When to use: Use bundle pricing if you sell products that are naturally used in tandem or by pairing products with additional services, such as warranties on electronic devices.

Bundle Pricing in Marketing

In my experience, marketing bundle deals can help you sell more products than you would otherwise sell individually. It’s a smart way to upsell and cross-sell your offerings in a way that is beneficial for the customer and your revenue goals.

5. Project-Based Pricing

Project-based pricing is the opposite of hourly pricing — this approach charges a flat fee per project instead of a direct exchange of money for time. It is also used by consultants, freelancers, contractors, and other individuals or laborers who provide business services.

Project-based pricing may be estimated based on the value of the project deliverables. Those who choose this pricing model may also create a flat fee from the estimated time of the project.

When to use: Use project-based pricing to help onboard customers who have fixed budgets but are unsure of total costs. The caveat? Make sure you have a clear scope of work before getting started.

Project-Based Pricing in Marketing

Highlighting the benefits of working with your business can make project-based pricing more attractive. Although the cost may be high, the one-time investment is worthwhile. Clients will appreciate knowing they can work with you until the project is completed, rather than being limited by a set number of hours.

6. Subscription Pricing

Subscription pricing is a common pricing model at SaaS companies, online retailers, and even agencies that offer subscription packages for their services.

Whether you offer flat-rate subscriptions or tiered subscriptions, the benefits of this model are endless. For one, you have all but guaranteed monthly recurring revenue (MRR) and yearly recurring revenue. That makes it simpler to calculate your profits on a monthly basis. It also often leads to higher customer lifetime values.

The one thing to be wary of when it comes to subscription pricing is the high potential for customer churn. People cancel subscriptions all the time, so it’s essential to have a customer retention strategy in place to ensure clients keep their subscriptions active.

When to use: Use subscription pricing if you sell services that are billed month-to-month or for products that customers need delivered on a recurring schedule.

Subscription Pricing in Marketing

When marketing your subscription products, I suggest you create buyer personas for each tier. That way, you know which features to include and what will appeal to each buyer. A general subscription that appeals to everyone won’t pull in anyone.

Even Amazon, which offers flat-rate pricing for its Prime subscription, includes a membership for students. That allows them to market the original Prime more effectively by creating a sense of differentiation.

Now that we’ve gone over how to create a pricing strategy and explored some of the most common pricing models, let’s discuss applying these steps to different businesses and industries.

Pricing Models Based on Industry or Business

Not every pricing strategy is applicable to every business. Some strategies are better suited for physical products, whereas others work best for SaaS companies. Here are examples of some common pricing models based on industry and business.

Product Pricing Model

Unlike digital products or services, physical products incur hard costs (like shipping, production, and storage) that can influence pricing. A product pricing strategy should consider these costs and set a price that maximizes profit, supports research and development, and stands up against competitors.

Pro tip: I recommend using these pricing strategies when pricing physical products: cost-plus pricing, competitive pricing, prestige pricing, and value-based pricing.

Digital Product Pricing Model

Digital products, like software, online courses, and digital books, require a different approach to pricing because there’s no tangible offering or unit economics (production cost) involved. Instead, prices should reflect your brand, industry, and overall value of your product.

Pro tip: I recommend using these pricing strategies when pricing digital products: competition-based pricing, freemium pricing, and value-based pricing.

Restaurant Pricing Model

Restaurant pricing is unique in that physical costs, overhead costs, and service costs are all involved. You must also consider your customer base, overall market trends for your location and cuisine, and the cost of food — as all of these can fluctuate.

Pro tip: I recommend using these pricing strategies when pricing at restaurants: cost-plus pricing, premium pricing, and value-based pricing.

Event Pricing Model

Events can’t be accurately measured by production cost. Instead, event value is determined by the cost of marketing and organizing the event, along with the speakers, entertainers, networking, and the overall experience. As a result, the ticket prices should reflect all these factors.

Pro tip: I recommend using these pricing strategies when pricing live events: competition-based pricing, dynamic pricing, and value-based pricing.

Services Pricing Model

Business services can be hard to price due to their intangibility and lack of direct production cost. Much of the service value comes from the service provider’s ability to deliver and the assumed caliber of their work. Freelancers and contractors, in particular, must adhere to a services pricing strategy.

Pro tip: I recommend using these pricing strategies when pricing services: hourly pricing, project-based pricing, and value-based pricing.

Nonprofit Pricing Model

Nonprofits need pricing strategies, too — a pricing strategy can help nonprofits optimize all processes so they’re successful over an extended period.

A nonprofit pricing strategy should consider current spending and expenses, the breakeven number for their operation, the ideal profit margin, and how the strategy will be communicated to volunteers, licensees, and anyone else who needs to be informed. A nonprofit pricing strategy is unique because it often calls for a combination of elements that come from a few pricing strategies.

Pro tip: I recommend using these pricing strategies when pricing for nonprofits: competitive pricing, cost-plus pricing, demand pricing, and hourly pricing.

Education Pricing Model

Education encompasses a wide range of costs that are important to consider depending on the level of education, private or public education, and education program/discipline.

Specific costs to consider in an education pricing strategy are tuition, scholarships, and additional fees (labs, books, housing, meals, etc.). Other important factors to note are competition among similar schools, demand (number of student applications), number and costs of professors/ teachers, and attendance rates.

Pro tip: I recommend using these pricing strategies when pricing education: competitive pricing, cost-based pricing, and premium pricing.

Real Estate Pricing Model

Real estate encompasses home value estimates, market competition, housing demand, and cost of living. There are other factors that play a role in real estate pricing models including potential bidding wars, housing estimates and benchmarks (which are available through real estate agents but also through free online resources like Zillow), and seasonal shifts in the real estate market.

Pro tip: I recommend using these pricing strategies when pricing real estate: competitive pricing, dynamic pricing, premium pricing, and value-based pricing.

Agency Pricing Model

Agency pricing models impact your profitability, retention rates, customer happiness, and how you market and sell your agency. When developing and evolving your agency’s pricing model, it’s important to take into consideration different ways to optimize it so you can determine the best way to boost the business’s profits.

Pro tip: I recommend using these pricing strategies when pricing agencies: hourly pricing, project-based pricing, and value-based pricing.

Manufacturing Pricing Model

The manufacturing industry is complex — there are several moving parts, and your manufacturing pricing model is no different. Consider product evolution, demand, production cost, sale price, unit sales volume, and any other costs related to your process and product.

Pro tip: I recommend using these pricing strategies when pricing manufacturing: competitive pricing, cost-plus pricing, and value-based pricing.

Ecommerce Pricing Model

Ecommerce pricing models are how you determine the price at which you’ll sell your online products and what it’ll cost you to do so. This means that you must think about what your customers are willing to pay for your online products and what those products cost you to purchase and/or create.

You might also factor in your online campaigns to promote these products, as well as how easy it is for your customers to find products similar to yours on the ecommerce sites of your competitors.

Pro tip: I recommend using these pricing strategies for ecommerce: competitive pricing, cost-based pricing, dynamic pricing, freemium pricing, penetration pricing, and value-based pricing.

Get Your Pricing Strategy Right

It’s easy to get overwhelmed by the sheer number of pricing strategy factors and components. From competitors to production costs, customer demand to industry needs, profit margins to making a profit, the list is endless. Thankfully, you don’t have to master everything all at once.

Instead, start small. Calculate your COGS, determine your ideal profit margin, carry out some customer research, and determine what’s most important for your business. Equipped with this information, you can find a pricing strategy that makes sense and drives revenue.

If there’s one thing I hope you take away from this piece, it’s that creating an effective pricing strategy is an iterative process. You probably won’t find the ideal price point right away. It might take a couple of tries (and lots of research), and that’s OK — slow and steady, not fast and reckless, takes the prize in pricing strategy.

Sales qualification streamlines the process of turning potential buyers into serious prospects.

When done well, sales qualification reduces the time required to determine if you’re talking to the right person. Are they interested in what you’re offering? Is there a specific business challenge your product could help them overcome?

I’ve had my fair share of practice — and I’ve learned that great sales qualification is more than worth the effort. Ready to get started? I’ve got you covered with our ultimate guide to finding and keeping qualified sales leads.

Table of Contents

• What is Sales Qualification?
• Why is Sales Qualification Important?
• Sales Qualification Stages
• The Lead Qualification Process
• What is a Qualified Prospect?
• Levels of Prospect Qualification
• When and Why to Disqualify Prospects
• How to Qualify a Lead with Lead Qualification Frameworks
• Sales Qualifying: Good Signs and Red Flags

Without sales qualification, you’d probably talk to hundreds of leads a day — only to wind up with just one or two closed deals to show for your effort.

Sales qualification is essential for working smarter, not harder. But why is it so crucial? Let’s take a look.

Why is Sales Qualification Important?

Sales qualification significantly improves close ratios. Otherwise, you risk pursuing leads who aren’t a good fit. They may have incompatible budgetary constraints or organizational challenges.

B2B buying groups spend 27% of their time conducting independent online research. With buyers doing so much self-education, effective sales qualification becomes even more critical to engage prospects at the right time with the right information.

There are a ton more reasons sales qualification is important. You can:

• Prioritize qualified prospects
• Deliver personalized selling experiences (our research even shows 75% of marketers believe personalized experiences drive sales and repeat business.)
• Maximize revenue impact
• Tailor processes for different verticals

I once tried to sell my content strategy service to a lead I hadn’t qualified. The partnership was a poor fit, and we had to cancel the agreement prematurely.

What does the sales qualification process look like as a whole? Let’s walk through that below.

Sales Qualification Stages

Stage 1: Create an ICP.

The first stage of sales qualification is creating an ideal customer profile (ICP). You identify the type of customers best suited to your product or solution.

For example, since I offer content writing and strategy service to B2B SaaS companies, my ideal market might consist of brands with enough funding to spend on my services.

Within an ICP, it’s also worth developing buyer personas that describe specific individuals within target organizations. These individuals have the experience and authority to address business pain points and make purchasing decisions.

Creating an ICP is a collaborative process between sales, marketing, and product development teams. However, the end result streamlines sales qualification, making the exercise time well spent.

Stage 2: Identify key criteria.

Next, identify criteria for sales leads before they’re placed in the qualification pipe. This process helps eliminate leads who are less likely to convert from interest to investment.

Key qualification criteria:

• Business budget.
• Buying authority.
• Urgency to deploy a new solution.
• Fit with existing company frameworks.

For example, a prospect with urgency and authority but no budget isn’t worth pursuing, despite their interest.

Pro tip: Create a checklist for these criteria you can distribute to salespeople to ensure all employees use the same method to evaluate sales potential.

Stage 3: Put technology in place.

The amount of sales, research, and prospect data required for successful sales qualification is substantial. Even experienced teams can get overwhelmed.

Deploy customer relationship management (CRM) solutions to capture and centralize data for sales and marketing teams. Your team can also track emerging trends in customer behavior to help create more effective sales strategies.

Stage 4: Do your homework.

The more you know about your leads, the better.

The sales process is about creating relationships, and even the best product won’t sell if your team fails to build reciprocal connections.

Research is crucial for building relationships. Before contacting leads, learn about their role, company, and any public insights they’ve shared.

It’s also a good idea to track down any relevant company information. This might take the form of a recent news article or a report posted on their corporate site. You can gain more context to the conversation.

Stage 5: Make contact.

Finally, reach out to set up a qualifying call.

With lead data in hand, connect via phone, email, or social media sites and set up a qualifying call. Use this call to understand the lead’s decision-making process, pain points, budgets, and needs — not to make an immediate sale.

More importantly, you’re looking to kick-start a relationship. If you go all-in on sales tactics during the first call and this approach doesn’t work, you’ve burned a bridge.

The Lead Qualification Process

Step 1: Lead Generation

The lead qualification process begins with a pool of leads generated through various channels. These typically come from marketing efforts, sales activities, acquisition campaigns, and product teams. For smaller organizations, leads may primarily originate from website form submissions.

Step 2: Initial Lead Classification

As leads enter the system, they’re classified into different categories based on their current status and level of engagement:

• Unqualified leads haven’t been nurtured enough in the flywheel to be forwarded to a sales team.
• Marketing qualified leads (MQLs) are suitable for marketing communications.
• Sales qualified leads (SQLs) are ready to connect with a sales representative.
• Product qualified leads (PQLs) have shown strong interest through freemium subscriptions or free trials.
• Conversion qualified leads (CQLs) have taken a specific action on your website, such as submitting a form or using a click-to-call button.

[Video: How to Qualifying Your Leads | Ask These 4 Questions to Generate Quality Leads online marketing]

Step 3: Lead Qualification Framework Application

Once classified, leads are evaluated using a lead qualification framework. This involves asking a series of qualifying questions to see if they’re a good fit for your product or service.

A qualifying question helps the salesperson determine their prospect’s fit for one criterion. That might be need, budget, authority, sense of urgency, or another factor.

A good qualifying question is typically open-ended. Instead of close-ended questions, like “Is this a priority right now?” the better version would be “Where does this fall on your list of business priorities?” to not lead the prospect to an answer.

Here are some strong qualifying questions that I like:

• What business challenge can this product help you solve?

• What has prevented you from trying to solve the problem until now?

• What does your budget look like for this project?

• Are you using any solutions to solve this problem? If so, why are you switching?

• What is your principal priority in terms of solving this problem? Which functionality would be most important?

The framework helps sales teams focus their efforts on the most promising prospects.

Step 4: Lead Segmentation and Next Steps

Based on the qualification process, leads are segmented into two main groups.

• Qualified leads proceed to the next stage of the sales process, where they’ll receive more personalized attention from the sales team.
• Disqualified leads are placed into a nurturing sequence. Here, they receive targeted content and communications aimed at warming them up to the product, with the goal of converting them into qualified leads over time.

Step 5: Refine Process

The lead screening process is not static. It requires ongoing evaluation and optimization. Continuously refine the lead screening process. Optimize questions, identify successful prospect traits, and adjust frameworks to improve sales efficiency and conversion rates.

Eddie Reynolds, host of the RevOps Corner podcast, dials down on how important it is to constantly iterate on your lead qualification process.

“You set that account score, and then you surface all these leads, and you hand them to salespeople, and then salespeople say, I call these leads, and these were worthless,” Reynolds says. “This isn‘t set, and forget it. You keep iterating until you get to the point that salespeople are saying, ‘Yeah, we’re calling these leads, and they‘re converting, and everybody’s happy.'”

What is a Qualified Prospect?

A qualified prospect has passed the initial screening and is now ready to enter the sales pipeline.

You’ll typically do the bulk of your qualification during a discovery call, but it certainly isn’t where qualification starts or ends. At every step of the sales process, you’ll continuously evaluate prospects for more and more specific characteristics.

Attributes of a Qualified Prospect

1. Clear Pain Points

PQLs need specific business challenges, not vague statements. Vague prospects are harder to nurture and close. Ask discovery questions to uncover specific pain points. Prospects aware of their challenges are more likely to qualify.

What to Look For

• Detailed answers to probing questions about pain points
• Specific issues with current solutions, indicating the need for change

2. A Budget (or a Willingness to Make One)

Have you ever had several calls with your prospect, only for the deal to die because they can’t afford your product? Discuss budget early to avoid wasting time on prospects who can’t afford your product.

Ask directly about their budget for your type of solution. This upfront approach saves time and helps focus on viable prospects. Qualified prospects have clear budgets, often evidenced by current spending on similar solutions or costly problems.

What to Look For

• Budget range aligning with or exceeding your prices
• Clear commitment to purchasing a solution

3. Purchase Power

A qualified prospect will be able to either make the final buying decision or sway the stakeholders who make the decision. Identify early if your prospect is a gatekeeper, decision-maker, influencer, or blocker.

Most often, they’ll be an influencer, but they must be the right type of influencer.

Focus on upper-level influencers who can present solutions to decision-makers. Entry-level influencers like coordinators or interns are often not qualified prospects.

The decision-maker will likely be a leader and usually not the person you’ll talk to during the prospect qualification process. Research the company‘s size and structure to understand your prospect’s proximity to decision-makers. In larger companies, managers may be further from final decisions.

What to Look For

• Mid-level job title with influence
• Track record of successful product recommendations or purchases (ask for examples)

4. A Deadline or Strict Timeline

Qualified prospects have urgent needs with specific timelines (like before next quarter or year) for purchasing solutions.

Another way to tell? I like to look for prospects citing declining business performance or ROI from current solutions.

What to Look For

• Specific timeline for purchasing decision
• Clear urgency driven by business needs

5. A Mutually Beneficial Relationship

Qualified prospects understand the mutual benefits of the relationship. They trust you to provide a solution that helps them succeed in their role and impress leadership.

Remember: You’ll likely be speaking to an influencer. The influencer, in the end, wants to shine in front of leadership.

What to Look For

• Prospects who engage actively and show clear trust in the selling process

Levels of Prospect Qualification

Sales reps must qualify prospects at three different levels — organization-level, opportunity-level, and stakeholder-level qualification. I’ll discuss each below.

Organization-Level Prospect Qualification

This is the most basic level of qualification. Here, you’ll determine whether you should do more research. If your company has buyer personas, reference them when qualifying a prospect. Does the buyer match the demographics of a given persona?

Questions you should ask at this stage include:

• Is the prospect in your territory?

• Do you sell to their industry?

• What’s the company size?

Opportunity-Level Prospect Qualification

Opportunity-level qualification determines if a prospect has a specific need you can meet and if they can implement your solution.

Opportunity-level characteristics reveal if a prospect can benefit from your offering.

To determine whether your prospect is qualified on an opportunity level, ask the following:

• Is the prospect familiar with the type of product you sell?

• Do they have a challenge that your product can help them solve?

• Do they have a team or a person who’ll be using the product?

Stakeholder-Level Prospect Qualification

After confirming company fit, assess your contact’s decision-making power with these questions:

• Is this purchase within your budget?
• Who else influences the decision?
• What are the purchase criteria, and who defined them?

When and Why to Disqualify Prospects

Disqualify prospects in this order: company fit, business pain, decision-making power. Don‘t force your offering where it doesn’t fit.

You could be speaking with the CEO of an organization with complete budget authority who passes stakeholder-level qualification with flying colors. But if there’s no problem, there’s no need for your solution. Qualify for business pain first.

Prospects must qualify at all three levels to advance. Disqualify if they lack knowledge of strategic goals, even if they pass other levels.

Disqualifying prospects isn’t negative — it helps focus on quality leads. Prioritize your time on the best prospects rather than spreading yourself thin across many leads.

How to Qualify a Lead with Lead Qualification Frameworks

A lead qualification framework is essentially a rubric that salespeople can use to determine whether a prospect is likely to become a successful customer.

Every customer and every sale is different, but all closed-won deals share commonalities. Sales qualification frameworks and methodologies help you qualify leads by distilling those shared characteristics into general traits reps can look for when qualifying.

The BANT Qualification Framework

BANT (Budget, Authority, Need, Timeline), the Old Faithful of sales qualification frameworks, is a widely used sales qualification framework covering key opportunity and stakeholder aspects.

BANT uncovers:

• Budget. Prospect’s buying capability
• Authority. Contact’s decision-making power
• Need. Business pain you can solve
• Timeline. Planned purchase date

[Video: B2B Sales Prospecting – Qualify Prospects with BANT (Budget, Authority, Need, & Time)]

Here are a few examples of BANT questions in the context of a prospect conversation:

Budget

• Do you have a budget set aside for this purchase? What is it?
• What other initiatives are you spending money on?
• Does seasonality affect your funding?

Authority

• Whose budget does this purchase come out of?
• Who else will be involved in the purchasing decision?
• How have you made purchasing decisions for products similar to ours in the past?

Need

• What challenges are you struggling with?
• Why hasn’t it been addressed before?
• What do you think could solve this problem? Why?

Timeline

• How quickly do you need to solve your problem?
• What else is a priority for you?
• Are you evaluating any other similar products or services?
• Do you have the capacity to implement this product right now?

BANT Limitations

While BANT addresses many opportunity-level requirements, it misses the mark on others.

The “ultimate” buying authority could be more than one person. Make sure you engage all relevant stakeholders early on in the process and secure each individual’s buy-in.

“Timeline” is another area where BANT falls short today. A strict BANT qualification might tell you to cycle a lead who won’t be ready to buy until next year.

MEDDIC Qualification Methodology

MEDDIC, developed by Jack Napoli at PTC, stands for Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, and Champion.

MEDDIC helps sales reps understand a company’s entire purchase process, improving forecasting accuracy for high-value enterprise sales.

Source

“From $0 to $100 million, [PTC was] successful because we sold a better widget,” HubSpot CEO Brian Halligan says. “From $100 million to $1 billion, we sold a shift in technology. MEDDIC became important because it‘s not just any old purchase — it’s a transformation of the business.”

MEDDIC is ideal for high-value products or those requiring business transformation. It helps understand how and why prospects buy and who champions your product internally. This information is crucial for maintaining an accurate pipeline.

CHAMP Sales Qualification Framework

The CHAMP Qualification Framework (Challenges, Authority, Money, Prioritization) prioritizes Challenges over Authority. It views authority as an opportunity to map organizational hierarchy, not a roadblock.

If your initial contact is a low-level employee, you can safely assume they won’t be the decision-maker. That doesn’t mean you should hang up the phone. Instead, ask questions that help you map the company’s organizational hierarchy to determine who to reach out to next.

GPCTBA/C&I Framework

GPCTBA/C&I (Goals, Plans, Challenges, Timeline, Budget, Authority/Negative Consequences, and Positive Implications), developed at HubSpot, responds to informed buyers by exploring prospects’ strategic goals and business models beyond the immediate problem.

This means understanding a prospect’s strategic goals, their business model, and how the specific issue you’re discussing fits into the larger picture of their professional life.

Source

Here are some of the questions you should ask at each step.

Goals

The purpose of the following questions is to find out your prospect’s quantitative goals. You can help clarify or set goals with your prospect if their response isn’t well-defined.

• What is your top priority this year?

• Do you have specific company goals?

• Do you have published revenue goals for this quarter/year?

Plans

Once you understand your prospect’s goals, find out what work they’ve already done to achieve them. Determine what’s worked and what hasn’t, and make suggestions for improvement.

• What are you planning to do to achieve your goals?

• Do you think XYZ might make it hard to implement your plan?

• Do you have the right resources available to implement this plan?

Challenges

Defining your prospect’s challenges — and reinforcing that what they’ve already tried isn’t working — is crucial. Unless they understand that they need help, a prospect won’t become a customer.

• Why do you think you’ll be able to eliminate this challenge now, even though you’ve tried in the past and you’re still dealing with it?

• Do you think you have the internal expertise to deal with these challenges?

• If you realize early enough in the year that this plan isn’t fixing this challenge, how will you shift gears?

Timeline

Your most important asset is your time. So, while a prospect that doesn’t want to buy now or in the near future isn’t necessarily a lost cause, they should move down your priority list.

• When will you begin implementing this plan?

• Do you have the bandwidth and resources to implement this plan now?

• Would you like help thinking through the steps involved in executing this plan, so you can figure out when you should implement each piece?

Budget

Just asking “What’s your budget?” isn’t a question likely to get you valuable insight, according to HubSpot sales director Dan Tyre.

Instead, try asking:

• Are we in agreement on the potential ROI of [product or service]?

• Are you spending money on another product to solve the problem we’ve discussed?

Then, go in for the kill. Databox CEO and former HubSpot VP of Sales Pete Caputa suggests phrasing the budget question this way:

“We’ve established that your goal is X and that you’re spending Y now to try and achieve X. But it’s not working. In order to hire us, you will need to invest Z. Since Z is pretty similar to Y and you’re more confident that our solution will get you to your goal, do you believe it makes sense to invest Z to hire us?”

Authority

Unlike in BANT, qualifying for authority under this framework doesn’t necessarily mean trying to determine whether your contact is a decision-maker. Your contact might be an influencer or a coach, two types of internal champions who can give you insight into the decision-maker’s thought process.

If your contact isn’t the economic buyer, ask them:

• Are the goals we’ve discussed important to [the economic buyer]?

• Amongst their priorities, where does this fall?

• What concerns do you anticipate they’ll raise?

• How should we go about getting [the economic buyer] on board?

Negative Consequences and Positive Implications

This part of the qualification process is about finding out what happens if your prospect fails.

“If your product can significantly help them avoid consequences and further aid in achieving even bigger follow-up goals, you’ve got a very strong value proposition,” Caputa says.

Here are some C&I questions to ask prospects:

• What happens if you do or don’t reach your goals? Does the outcome affect you on a personal level?

• When you overcome this challenge, what will you do next?

• Do you stand to get promoted or get more resources if you can hit your goal? Would you lose responsibility or be demoted if you don’t?

GPCTBA/C&I provides valuable insights for complex, differentiated products integral to a prospect’s strategy. But its thoroughness may not suit all sales processes.

ANUM Sales Framework

ANUM (Authority, Need, Urgency, Money) is an alternative spin on BANT. When qualifying using ANUM, a sales rep’s first priority should be to determine whether they’re speaking with a decision-maker.

FAINT Sales Framework

The RAIN Group advocates using FAINT (Funds, Authority, Interest, Need, Timing) to qualify sales leads. FAINT reflects the fact that many purchase decisions are unplanned and thus won’t be associated with a set budget.

Like ANUM, reps using FAINT should look for organizations with the capacity to buy, regardless of whether a discrete budget has been set aside. FAINT also adds Interest into the mix.

Source

According to RAIN Group’s John Doerr and Mike Schultz, Interest is defined as “[generating] interest from the buyer in learning what’s possible and how to achieve a new and better reality than the one they have today.”

Sales Qualifying: Good Signs and Red Flags

According to Sarah Casdorph, a demand automation manager at HubSpot, if your lead qualification framework is doing its job, the vast majority of your leads actually will not be qualified.

This isn’t a loss though.

“That nurture experience is what‘s going to keep your leads warm, so that maybe when the next budget cycle rolls around, or maybe when they’re more educated on the business problem or kind of their opportunity, then your brand will be the first one to come to mind,” Casdorph says.

In fact, companies that excel at lead nurturing generate 50% more sales-ready leads at a 33% lower cost.

At the same time, there are some telltale signs that scream “good” or “bad” leads. Here are some tip-offs (both good and bad) to listen for when qualifying a prospect that can help you determine whether to upgrade a lead or disqualify ASAP.

Good signs to move a prospect forward:

• Excuses — Indicate real pain, either through legitimate reasons or attempts to rationalize inaction.
• Specificity — Detailed answers show careful consideration of the problem. Look for sequential plans and statistics.
• Knowledge — Decision-makers show intimate understanding of company goals, challenges, and needs.

Red flags in the sales process:

• Inconsistency — Contradictory answers may indicate lack of knowledge. Consider qualifying with another contact.
• Short answers — One-word responses suggest the problem isn’t pressing or the contact lacks insight. Evaluate whether to disqualify or reach out to others in the organization.
• Personal email addresses — The lead is using a personal email address (e.g. Gmail, Yahoo) rather than a business email. This may indicate they are not an actual decision-maker.

Sales Success Depends on Effective Qualification

Trust me: Your ability to find good-fit prospects will make or break your business. Prospects who turn into happy customers mean not only revenue, but increased word-of-mouth, referrals, and the possibility of cross- or upselling.

This guide can help you streamline your qualification process to find better leads, get them interested in what you’re offering, and put them on the path to ongoing purchases.

Time is a precious resource in sales. The efficacy of your sales process, whether a deal winds up closed-won, and virtually every KPI used to gauge your performance all hinge upon how effectively you spend yours.

But efficiently and effectively allocating your time can be tricky in sales, and running into at least a few time-wasters here and there is par for the course. That’s why you need to stay on top of any potential time-draining hitches and understand how to remedy them when you hit them.

To help you get there, we here at The HubSpot Sales Blog — the mitochondria of the broader sales and sales-adjacent content cell — reached out to a few sales leaders for some perspective on common ways sales professionals waste their time and how to best avoid those pitfalls.

8 Common Ways Sales Professionals Waste Their Time

1. Engaging With Unqualified Leads.

Ulyana Shnitsar, Sales Manager & BDM at Mgroup, says, “As a sales professional in B2B sales, I have come across salespeople who tend to lapse into time-wasting activities, some of which I myself have been guilty of.

“I have seen people engaging with unqualified leads. Getting excited about a promise is one thing, but if the prospect is not a perfect fit, one can end up wasting time. To make the most out of my time, I have switched to using better qualifying questions.”

2. Over-Preparing

Shnitsar also says, “Sometimes, people set out to achieve goals which can be classified as over-preparing. Working on preparation is important, but not to the extent that I would spend hours designing a presentation folder with the perfect pitch deck or practicing each and every hypothetical scenario. Now, my approach is to know the issues of the client and have a sharp outline of steps I want to accomplish to solve all the issues.”

3. Running Product Demos That Don’t Connect With What a Buyer Actually Cares About

Katie Breaker, Sales Director at BirdieBall, says, “A walkthrough of every single feature might seem helpful, but buyers are not looking for a list of tools. They want to know how the product solves their specific problem. Starting the demo with a conversation about their challenges and then showing exactly how the product helps keeps them engaged. The more relevant the demo feels, the more likely the deal moves forward without unnecessary delays.”

4. Neglecting Followup and Not Fostering Long-Term Relationships

Arjun Narayan, Founder and CEO of SalesDuo, says, “A surefire way to waste time is by neglecting follow-ups and failing to develop meaningful long-term customer relationships. If you fail to stay in touch, you will waste valuable chances for repeat sales and referrals.

“Prioritize establishing robust long-term relationships with your customers and nurture loyalty and trust. Develop a strategic follow-up approach, engaging promptly and consistently with prospects and current customers.”

5. Chasing Deals That Are Already Dead

Scott Gabdullin, CEO and Founder of Learo, says, “Chasing deals that are already dead. It is easy to reassure yourself that a prospect simply needs one more follow-up, but somewhere in your gut, you know when something has no real momentum.

“The most effective way to prevent this practice is by establishing clearly defined exit criteria — if the deal at hand hasn’t made meaningful progress after a certain number of follow-ups, it’s time to let go of the prospect. Direct your efforts toward strong prospects who have a great likelihood to close in the near future. Eliminating dead leads allows for more fruitful conversations that actually get you somewhere.”

6. Over-Customizing Sales Pitches

Niclas Schlopsna, Managing Consultant and CEO of spectup, says, “A classic time-sink is over-customizing sales pitches. I remember working with a SaaS startup where sales reps were spending hours crafting hyper-specific decks for each meeting, only to find that 80% of their content never came up in conversations.

“The solution? Building flexible but modular presentation frameworks that allow the salesperson to tailor key pieces without reinventing the wheel every time. This saved the team hours per week and gave them more focus for actual selling.”

7. Following up Without Clear Next Steps

Schlopsna also says, “Endless follow-ups without a clear next step can kill productivity. One of our team members at spectup always emphasizes the importance of ending every interaction with a clearly defined action point — whether that’s scheduling the next call or agreeing on deliverables.

“It sounds simple, but it prevents what I call the ‘limbo loop,’ where you’re emailing back and forth without progress. Eliminating these inefficiencies doesn’t just save time; it also gives sales teams more energy to focus on the deals that matter.”

8. Over-Talking in Demos

Guillaume Drew, Founder of Or & Zon, says, “Sales reps often fall into the trap of over-explaining features without fully understanding customer pain points. A key element of success here is to talk less and listen more.

“Adopting consultative sales techniques has worked wonders for me. In these techniques, the demo is more of a discussion, which makes it easier to tailor the demo specifically to the client’s needs. This reduces the time required while increasing the effectiveness of the interaction, which in turn drives sales and enhances customer satisfaction.”

As I mentioned at the top of this article, time is one of the most — if not the most — precious resources you have in sales, but it can be just as easy to waste it as it is to capitalize on it. Hopefully, this article gives you valuable perspective on what you might be doing wrong and how you can adapt to ensure you’re getting as much out of your efforts as possible.

AI is becoming a core part of CRM systems. Considering the time-saving benefits, it’s unsurprising that generative AI CRMs can be incredibly valuable in helping businesses grow.

I’ve already written an article on CRMs with AI, but I wanted to take my curiosity about AI and CRM one step further. So, in this article, I’m focusing specifically on three generative AI CRMs, how generative AI can improve the sales process, and much more.

While researching this article, I’ve tried to find unique ways of using generative AI in CRMs. I’ve also spoken to people using it in their CRM systems, so you’ll know how people are actually using generative AI features daily.

Table of Contents

• What is a Generative AI CRM?
• Benefits of Generative CRMs
• How to Use Generative AI in a CRM

What is a Generative AI CRM?

A generative AI CRM is a CRM system with built-in AI features. This can range from simple tasks like text generation for emails, messages, and meeting notes — to more complex task sales needs. For example, you can use generative AI to complete your prospects’ profiles, including company information.

Benefits of Generative CRMs

It’s probably not a huge surprise that artificial intelligence offers huge benefits for CRMs and sales.

In the infographic below, PixelPlex details some of the benefits of generative AI for business generally. They include reduced costs, boosted productivity, upgraded decision-making, and improved personalization — just to name a few.

All of these benefits play out in generative AI CRMs, and I will explore how in the next section.

Saves Time

I’m going to start with time-saving because, for me, this is a major benefit of generative AI for sales teams.

As a writer, I don’t rely heavily on generative AI in my daily workload. Still, I have always appreciated how much time AI can save when used correctly, and I’m certainly not the only person who credits generative AI with saving time.

The HubSpot State of Sales and AI survey also found that sales teams saved two and a half hours per day thanks to AI, which handled meeting scheduling, note-taking, outreach creation and editing, and CRM data entry.

Much of this work can be incredibly monotonous. Instead of writing out meeting notes or manually recording customer data, you can rely on the generative AI to do a lot of the work for you. Instead of writing everything from scratch, AI tools can get you rolling, leaving you with review and edit tasks only.

Data Population

Data population is the most common use of generative AI by sales teams. Our survey showed that 35% of salespeople surveyed are using generative AI for data population, note-taking, and scheduling.

There’s a reason this is the most popular use case: Generative AI is good at it and can save sales reps a lot of time.

Tone and Confidence

With generative AI, you can change the tone of your messages to help you come across as you intend: professional, witty, formal, or optimistic.

When you generate content, you can set a tone, add your prompt, and click “generate.” The AI will do the rest. I’ve demonstrated this fully in the section below.

As you can see from the screenshot above, the fifth use case for generative AI is changing the tone of messages to sound more formal or casual.

How to Use Generative AI in a CRM

I wanted to dig into the generative AI options in CRMs. I looked at HubSpot, HoneyBook, and Capsule CRM to compare features.

Generative AI in HubSpot CRM

I’m not just saying this; HubSpot’s generative AI is fantastic. I love how HubSpot has pushed AI from being CRM-centric to supporting the sales role across tools and software. The integrations and ease of use are next level.

The ease of use of HubSpot’s generative AI CRM has resulted in HubSpot users using AI sales tools more frequently than non-HubSpot users.

The data speaks for itself.

Here are some ways that I tested HubSpot’s generative AI tools.

Test One: Hubspot’s Generative AI-Powered Assistant, Chatspot

You can think about HubSpot’s ChatSpot as your virtual assistant. ChatSpot will answer virtually any question you ask using natural language and get you to data faster than browsing through your CRM.

Here’s an example.

I logged in and asked ChatSpot, “Hi, how many contacts are in my CRM?”

ChatSpot responded almost instantly with the total contacts. There are 3,600.

Next, I wanted to know how many contacts were added in August. ChatSpot replied instantly again with the total amount of contacts added in August, 104.

What I liked about using the CRM’s generative AI: ChatSpot instantly quickly answered questions. There is no way I could’ve gotten to that information faster by navigating through the CRM. In this example, I’ve used ChatSpot for the most basic questions, but you can also ask more sophisticated queries like access to reports or finding information on company funding rounds.

Test Two: Hubspot’s Generative AI Email Content

This is a fantastic feature. What I love about HubSpot’s generative AI email content is that you can a) access this toolbox while in your inbox and b) send emails directly to HubSpot CRM once they’re written.

Let me talk you through it.

Step One: Download the HubSpot Chrome extension.

If you want to use HubSpot’s generative AI to write an email in your inbox, you need to download HubSpot’s Chrome extension.

It’s so easy to download; just click the blue button, and it’s there. To use it, you need to create a free HubSpot account.

Step Two: Open your emails.

I used my Gmail account to do this. Once you’ve installed the extension and are in Gmail, you’ll see the HubSpot icon at the top left (see the screenshot).

Step Three: Start composing your email and log in.

Now, you just need to hit compose and log into your HubSpot account.

Once that’s done, you’ll have all the generative AI and more features.

The features you can use within your inbox include templates, meetings, tasks, and “Write an email for me.”

For this, we’re going to click “Write an email for me.”

Step Four: Prompt the AI.

Once you click “Write an email for me,” you’ll get a pop-up. Here, you need to prompt the AI with:

• Your email type
• What you’re selling
• Who you’re selling to
• A description of what you want to communicate
• The desired tone of your email

I prompted the AI pretty basic for this, but you will want to play around with prompts, get detailed, and consider saving templates to speed up the process. With AI, the more you put in, the better the AI output.

Step Five: Review and edit the output.

The output was on my screen in seconds. It was almost instant.

If you click within the text box, the “Insert content” button turns orange, and you can instantly add it to your email with one click.

What’s great about HubSpot’s email features is that you don’t have to keep all of this out of the CRM.

What I like about HubSpot’s Generative AI: I thought this entire process was easy and evidence for the above stats. If AI is easy to use, sales teams will gravitate towards it. A little extra add-on that makes this feature even better is that if you’re logged into your Google account, you’ll be able to click “Log email to HubSpot” so that it feeds into the CRM.

Generative AI in HoneyBook CRM

HoneyBook is a generative AI CRM that my good friend and business owner, Crystal Waddell, introduced me to.

Waddell runs an ecommerce business, Collage and Wood, and uses HoneyBook, a generative AI CRM. She was very happy to share how her generative AI CRM supports her with client communication, order workflow, email updates, and more.

Waddell says, “I use [HoneyBook] for client communication for my ecommerce site. Whenever someone makes an order, I manually put in their information and apply an automation based on their purchase. It reminds me to email them updates, send proofs, and keep communication ongoing until their item ships. Then afterward, it prompts me to follow up.”

I was intrigued to see the generative AI in action, so Waddell and I tested it.

Step One: I sent Waddell a message.

First, I sent Waddell an email, and as you can see, she received it directly to her CRM via the mobile app.

Step Two: Waddell creates a response using the CRM’s generative AI.

The AI composer within HoneyBook gets to work on writing a response. The wait time for the response is around 30 seconds, which is not too bad at all. Sometimes, it can take me a lot longer than 30 seconds to find the right words, so I felt this generative AI was efficient.

HoneyBook CRMs generative AI is working to understand the project context, review the prior communications, and add Waddell’s personal style.

The tick box system usefully guides the HoneyBook CRM user through the steps before the content is generated.

The final phase is “drafting a response for review.”

Step Three: Review generative AI results.

Finally, after just 30 seconds, the generative AI provided a reply, all within the CRM app.

Waddell describes her generative AI as a “built-in assistant” and credits the system with keeping her “client-focused” so she can keep their project running on time.” A great example of generative AI and customer-centricity.

Waddell really loved the generative AI features in HoneyBook, and even though she’s using it smartly, she recognizes that she could use a zap to transfer client information instead of writing it manually. The point here is that there’s even more to get out of the CRM, and Waddell has many opportunities to explore.

What I liked about using the CRM’s generative AI: I really liked how HoneyBook’s final screen, as it generated the AI content, was “drafting a response for review.” This final step hopefully encourages the user to give the content a read and probably an edit before it’s pushed out to the customer/client.

I also really liked the next steps provided by the AI. With one click, you can request that the generative AI regenerates the response with actions, such as “change tone,” “make it shorter,” and “discuss broader impact.”

Generative AI in Capsule CRM

My third and final test was Capsule CRM.

It was so easy to set up an account and start using the generative AI to create emails. I’ll walk you through the process.

Step One: Connect your emails.

Before you can send an email from within Capsule CRM using generative AI, you need to connect your inbox.

You’ll find your mailbox connections in your Account Settings (click the profile/drop-down menu at the top right of the screen). Follow the screen to “Mailbox connections.”

Once you’re there, hit connect, and the connection will be made in minutes.

Step Two: Prepare your first generative AI email.

You can email via the contact section of the CRM, so navigate to the contact you want to email and click send email.

Once you’ve clicked send email, the email composer will pop up. You’ll see a black icon with a white pencil in the bottom right, as pictured below. Click it.

Next, you’ll get the screen below. You simply need to prompt the AI. I wrote a simple prompt.

Like the HubSpot Chrome extension, you get tone options. You can choose from “professional,” “casual,” “straightforward,” “confident,” and “friendly.”

The options are good, but the prompt is more straightforward. I prefer how HubSpot gave pointers on what to add (e.g., who to write for, what service you are selling). The Capsule Content Assist is less targeted, and you might need to understand prompting to get a decent output with Capsule.

Nonetheless, I hit generate, and the output was good!

Step Three: Review and edit your prompt.

The AI-generated content wasn’t as fast as HubSpot’s, but it wasn’t slow either. I received my response in seconds.

I was actually really happy with the output. It was short and sweet and positive, too. I wouldn’t need to edit that much before I sent it to a client.

Try a Generative AI CRM

As you can see, generative AI within a CRM can save a lot of time. I had a lot of fun testing these three generative AI CRMs and think it’s worth exploring.

For many people reading this, you might already have a CRM in place, and most likely, it has some kind of generative AI waiting for you to explore it.

The fact is that it’s easier to bring generative AI processes via tools you’re already using, so don’t sleep on generative AI. It could save you time, improve your emails, and get you back to doing what you love as you give the AI the mundane.

When I started out in sales, I avoided video calls with prospects for months, convinced I could build trust just as well through email. But during one particularly challenging quarter, I decided to test this assumption — and sales mirroring — by turning my camera on for every sales conversation.

What I discovered changed everything: When I could see my prospects’ expressions and gestures, I naturally matched their energy and communication style. My close rate nearly doubled.

Understanding how to mirror others effectively — especially in remote sales conversations — has become my secret to building instant rapport. Let me show you how it works.

Table of Contents

• What is sales mirroring?
• The Science of Mirroring (and Why It’s So Effective in Sales)
• Why is sales mirroring important?
• Examples of Mirroring in Sales
• How to Conduct Sales Mirroring

The goal is to create a behavioral reflection that puts prospects at ease with an unspoken, innate understanding — even if the sales lead and staff have never met.

The Science of Mirroring (and Why It’s So Effective in Sales)

You’ve probably experienced this before: You’re deep in conversation with someone who nods along as you speak, matches your energy level, and uses similar phrases to yours. Before you know it, you feel like you’ve known them forever.

This natural rapport-building process has a name: mirroring. And research shows it’s more than just a social phenomenon — it’s hardwired into our brains.

When we mirror someone’s behavior, we activate what neuroscientists call “mirror neurons.” These specialized brain cells fire both when we perform an action and when we observe someone else performing that same action. Mirror neurons help us understand others’ intentions and emotions, creating a neural bridge between people.

Multiple studies demonstrate the powerful impact of mirroring in professional settings. A groundbreaking study from the Journal of Experimental Social Psychology found that MBA students who mirrored their negotiation partners’ behaviors reached successful agreements 67% of the time, compared to just 12% for those who didn’t mirror.

Our 2024 State of Sales Trends shows that relationship-building is central to effective sales. In fact, 82% of sales professionals say that connecting with people is both the most important and most enjoyable part of their job​.

Mirroring, as a natural rapport-building strategy, complements this perfectly by fostering genuine connections that align with this priority.

One Harvard Business Review study tracked retail sales professionals selling MP3 players. Those who subtly mirrored their prospects’ verbal and non-verbal behaviors saw a 17% higher closing rate compared to those who didn’t mirror. More notably, these customers were also more receptive to recommendations and gave higher satisfaction ratings.

The main insight for sales professionals? Mirroring creates genuine connections through our natural human tendency to align with others. When done authentically, it helps both parties communicate better and understand each other better.

Why is sales mirroring important?

Mirroring is basically a shortcut to familiarity. It usually takes time to develop rapport naturally, so by mimicking phrases or gestures, salespeople can create a sense of familiarity quickly.

Sales Mirroring Benefits

When done right, sales mirroring can result in:

• Increased trust. Mirroring increases overall trust between the salesperson and prospect because it helps blur the line between business and personal interactions. Potential customers are often more willing to compromise with someone they can trust.
• Improved focus. Mirroring also increases your ability to focus because you’ll be more actively engaged and attuned to what your customer is saying and doing during the deal.

Sales Mirroring Mistakes

Mirroring might sound like the perfect strategy, but you should use it carefully. I’ve laid out some pitfalls of the strategy below.

• Mirroring isn’t very effective in group settings. Mirroring works far better in one-on-one sales than in a group since you have the client’s undivided attention rather than being split across multiple team members.
• Obvious mirroring can be off-putting. Subtlety is key. Obvious, over-the-top mirroring won’t result in better rapport — it’ll give customers the impression that you’re mocking them or making fun of a specific behavior. The best mirroring is small and subtle.

Examples of Mirroring in Sales

Mirroring works — but what does it actually look like in practice? I got in touch with experts and asked them to share actual examples of mirroring in sales.

Tweaking the Language to Match Value-Driven Partners

Effective mirroring goes beyond words — it means reflecting your prospect’s core values and mission. By understanding the vocabulary and principles driving their decisions, you can tailor your pitch to align with what matters most to them.

Michelle Nguyen, product owner and marketing manager at affiliate and influencer marketing solution UpPromote, showed how small language changes can have a huge impact on affiliate partnerships.

When pitching to a lifestyle brand, she noticed their emphasis on “sustainable impact” and “community-driven growth.” Her team revamped their communication strategy rather than sticking to standard commission-focused messaging.

Here’s how she describes the shift: “Rather than stating, ‘Our products help the environment,’ we said, ‘Our partnership creates sustainable impact through conscious consumer choices.’

“We redesigned our affiliate dashboard language to capture this community-centric perspective, then created fresh advertising materials stressing the community-building component of our program instead of only commission rates.”

I love this example because it shows how powerful it is to go beyond surface-level mirroring. Nguyen didn’t just parrot back specific phrases — she recognized the deeper values driving her prospect’s business decisions and rebuilt her entire approach around those values.

How Personal Language Shifts Can Close Deals

Pay attention to subtle shifts in language patterns — especially changes from business-focused to personal pronouns to address unspoken concerns.

At custom printing company Inkthreadable, Head of Business Development Matt Simmons mastered reading between the lines during sales negotiations. When a prospect’s tone shifted during pricing discussions, instead of rushing to offer discounts, he focused on uncovering the deeper issue.

The real insight emerged from studying the prospect’s change in language patterns. The switch from collective to personal pronouns signaled a deeper concern that standard business-value propositions weren’t addressing.

Here’s how Simmons handled this moment:

“After a few objections, I noticed his language had shifted. Earlier, we discussed the wider business and team, but now his objections were personally focused. I revisited the pitch, highlighting how our service directly benefited him, not just the business.”

I’ve seen this dynamic play out countless times in sales conversations. Decision-makers often mask personal concerns behind business objections. The skill lies not in countering their stated objections but in recognizing and addressing the underlying personal stakes.

This works because, in B2B sales, we sell to businesses but close deals with individuals who need personal confidence in their decisions.

Using Energy Alignment to Drive Sales During Uncertainty

Successful mirroring goes beyond individual conversations — it requires reading and responding to the collective psychology of your market. When major disruptions shift how entire industries think about growth, your mirroring approach must evolve to match that new emotional reality.

At The Agency Growth Pad, Founder Ali Newton-Temperley learned how reading market sentiment could change her mirroring approach. During the pandemic, she noticed a major shift in how business owners engaged in sales conversations.

The traditional high-energy, growth-focused pitch suddenly felt tone-deaf. Business owners weren’t looking for transformation — they were seeking stability and reassurance.

Here’s how Newton-Temperley describes this pivot: “Pre-pandemic agency sales had been about things like ‘transforming growth,’ ‘increasing your sales,’ etc. But when the pandemic hit, and different countries started having lockdowns, the mood of business owners changed significantly. The aim of looking for growth had shifted into a search for comfort and consistency.”

I’ve learned that market conditions often create collective emotional states among business owners. During uncertain times, mirroring isn’t just about matching individual prospects — it’s about tuning into broader market psychology.

This example highlights the importance of recognizing deeper emotional currents. By shifting from aspirational pitches to steady expertise, Newton-Temperley showed that effective mirroring often requires reimagining your approach to fit the market’s emotional reality.

So, what does sales mirroring look like in practice? Read on to find out.

How to Conduct Sales Mirroring

1. Mimic body language or positioning.

If your customer sits down and crosses their legs or arms, you should sit similarly.

If they lean back while talking, mirror that movement. If they sit up straight in their chair, don’t slouch.

Body position mirroring signals that you’re on the same page as the customer, whether relaxed, focused, serious, or otherwise.

But here’s the crucial part: Don’t mirror immediately or exactly. As Simmons from Inkthreadable notes:

“When mirroring, people either hyper fixate on one aspect, so commonly people copy posture, but what they tend to do is force it and try to be a direct reflection of the other person, which can be off-putting as it is quite obvious. Instead, take time to make a few mental observations and, throughout the pitch, slowly bring them into your own mannerisms.”

Think of body language mirroring as a gradual alignment rather than instant mimicry. Create comfort and rapport; don’t make the other person feel self-conscious or manipulated. Watch for recurring gestures or positions and naturally incorporate them into your own movements over time.

This approach works because it taps into our brain’s natural tendency to build trust through physical synchronization. When we share similar body language with someone, our mirror neurons fire up, creating an unconscious bond that makes communication flow more easily.

2. Use a similar tone of voice.

Many salespeople are gregarious, friendly, and excitable. They may speak loudly and quickly to convey their passion for a particular product or service — but this won’t work as well if prospective clients are quiet and reserved.

Newton-Temperley from The Agency Growth Pad explains why energy matching matters more than traditional mirroring:

“The biggest mistake I see isn’t really in the mirroring in language — it’s usually being too focused on mirroring words and, as a consequence, failing to mirror the energy and meet the prospect with the energy that they are looking for. If someone is very to the point, you’ll likely do better if you communicate succinctly, too.”

Read the room and adjust your communication style accordingly. Some prospects want detailed explanations and data-driven discussions. Others respond better to high-level concepts and emotional resonance. Your ability to shift between these modes often determines whether you can build genuine rapport.

I’ve found that matching a prospect’s energy level creates an immediate sense of understanding. When you communicate in their preferred style, they’re more likely to feel heard and respected, making the entire sales conversation more productive.

Take a cue from customers and match their tone of voice or energy levels to send a message of respect and foster a fundamental connection. You’re paying attention to how they prefer to receive information, not just what information you want to share.

3. Adopt their communication style.

Does your prospect want all the details about their purchase, contract, and payments up-front — or are they more concerned with the bigger picture? Do they seem more interested in small talk than sales numbers, or are they pressing for specifics?

Your ability to recognize and adapt to these preferences can make or break a sale.

Marty Bauer, director of sales and partnerships at Omnisend, describes this deeper level of mirroring:

“I call it advanced mirroring when I see the prospect’s energy imitated in every aspect of the interaction — body language, humor, problem-solving, even how they structure ideas. If the customer is enthusiastic, we positively reinforce it; if they’re analytical, we shift to a slower, fact-based approach.”

Pay close attention to how prospects process information. Some want to explore every detail of your proposal, while others prefer focusing on key outcomes. Don’t be afraid to abandon your standard pitch structure if it doesn’t match their thinking pattern.

The best salespeople are conversational chameleons. They can shift from high-level strategic discussions to detailed technical specifications based on their prospect’s preferences.

This flexibility shows prospects you’re genuinely interested in communicating on their terms, not just following a script. Also, validate your understanding by summarizing key points in their preferred style — whether that’s bullet-point specifics or broader conceptual frameworks.

4. Talk about shared experiences.

You can build rapport through shared experiences, whether discussing local events, industry challenges, or mutual professional interests. But there’s a balance between finding genuine connections and manufacturing false ones.

Michelle Nguyen from UpPromote demonstrates how to create authentic alignment: “We don’t just ask for referrals from fellow writers — I offer to give them too. It’s about understanding and really reflecting the viewpoint of our possible partners, not only about choosing the correct words.”

Before your sales conversations, do your homework. A quick LinkedIn review might reveal shared connections, similar career paths, or overlapping industry experience. These natural touchpoints create genuine opportunities for connection.

Focus on finding real common ground. This might be shared business challenges, similar market experiences, or mutual professional goals. Authentic connections, even small ones, build more trust than elaborate but artificial commonalities.

Pro tip: It’s better to acknowledge what you don’t know and show genuine curiosity than to bluff your way through a conversation. Your prospects will appreciate your honesty and transparency.

5. Use gesture recognition.

Many people have a specific gesture they repeatedly use for emphasis, such as a head nod, hand wave, or shoulder shrug. By recognizing this gesture, performing it occasionally, and mirroring the motion naturally to potential customers, sales pros can boost that person’s overall confidence and trust.

Matt Simmons from Inkthreadable shares this nuanced approach: “Does the prospect have a recurring hand gesture? Rather than directly match it immediately, wait until you’re covering a similar topic to what they did with the hand gesture and then bring it in. The key is making it feel natural and not forced.”

Think of gesture mirroring as learning a new dialect of body language. Just as you wouldn’t suddenly adopt someone’s accent mid-conversation, you shouldn’t abruptly copy their gestures. Instead, let these movements naturally blend into your communication style over time.

This subtle mirroring works because it creates physical harmony in the conversation without drawing attention to itself. When done right, it helps build unconscious rapport while keeping the focus on your message.

Incorporate Sales Mirroring Into Your Strategy

The most powerful connections happen when we stop trying to be perfect sales professionals and start being genuinely present with our prospects.

I used to overthink every gesture and word choice in sales calls. Now, I focus on one thing: listening to understand my prospect’s world. When I do this, the right words and gestures flow naturally. My prospects feel heard, and I close more deals.

Editor’s note: The article was originally published in January 2021 and has since been updated for comprehensiveness.

When I worked at a SaaS company, one of my responsibilities was to create content — and there were dozens of articles that I created, which were also signed with my name. The articles featured plenty of first-person experiences.

After I left, a new person took over and replaced my name with theirs as the author. While this wasn’t illegal, was it ethical? That’s a subject for debate. From my perspective, unless a piece was ghostwritten, putting a new name simply because the original author left the company is not okay.

That’s just one example of a situation that could have been avoided by setting and following business ethics within the organization. Creating and documenting ethical practices can prevent more than “just” hard feelings. it can also protect your company from violating laws, treating your staff inequitably, and suffering from reputational damage.

Table of Contents

• What are business ethics?
• Why are business ethics important?
• Principles of Business Ethics
• How to Build an Ethical Business

What are business ethics?

Business ethics are the guidelines a company establishes that help teams make moral decisions. At the highest level, you can think of them as a cheat sheet for what each company defines as a “good” and “bad” practice.

So, why do you need them?

In my opinion, the best answer comes from Harvard University, which argues that business ethics comes down to “different interpretations of what’s ethical.” When faced with the same situation (especially a “gray area”), different people will decide on a different approach — that is, unless they have business ethics to lean on.

Why are business ethics important?

Business ethics relate to all groups — your investors, customers, and employees alike. Here are a few reasons why it’s worth putting them in place.

To Avoid Legal Consequences

Let’s start with the obvious — businesses that act unethically might face legal action. Volkswagen, the German car manufacturer, is the perfect example of how not to act. Back in 2015, they caused a scandal later known as “Dieselgate.”

To cheat on emission tests, the brand installed illegal software in its diesel cars. It detected when the vehicle was undergoing testing and altered its performance to meet regulatory standards. In reality, it emitted up to 40 times the allowed levels of pollutants during regular use. Volkswagen deliberately deceived consumers who were unaware of how much environmental harm their cars were causing.

The company faced lawsuits and had to pay $30 billion globally in settlements and regulatory penalties. Not only did the business suffer financially, but it also damaged its brand reputation.

To Build Customer Trust

I think that companies should treat customers’ trust like Fabergé eggs. Trust is fragile. Sometimes, the damage is irreversible.

While I’m sure you’ll agree that Volkswagen landed on its four feet and few people remember the scandal from a decade ago, some brand names will forever be tarnished (think: Wells Fargo, a bank that had to pay $3 billion for illegal and unethical practices).

Business ethics, such as fair treatment and transparency, hold everyone in your organization accountable for their actions. They help ensure that all the information you share with your clients (whether on the service, product, or the company itself) are true. The more open and honest you are, the stronger their belief in what you do.

To Improve Profit

As opposed to what many people think, it’s the ethical companies that make the most profit. People prefer to buy from brands that match their values, and they’re often willing to pay a premium price for ethical products or services.

Etisphere first launched the World’s Most Ethical Companies recognition program in 2006. Two decades later, brands like Pepsico, Aflac Incorporated, and Allianz were among the most ethical businesses in 2024. They also discovered that companies that prioritize business ethics outperformed their competitors by 12.3% between 2019 and 2024.

To Attract and Retain the Best Talent

This has become particularly noticeable post-pandemic. In the last few years, I’ve seen a few interesting studies that directly link employee retention and talent acquisition to company values.

The most eye-opening statistic I saw comes from Qualtrics, which found that 54% of workers would choose a lower-paying job if that meant they were working for a “more ethical” company.

I’ve seen this first-hand. At one of my previous companies, I worked with an incredibly skilled marketer who moved to our company from a large corporation. Initially, I thought they decided to move because they were offered a higher salary and the ever so cliché “opportunity to work in an innovative environment.”

Eventually, they told me they decided to leave the previous company for ours as the latter was much closer to their personal, ethical values — even though it came with a salary cut.

Principles of Business Ethics

1. Integrity

Acting with honesty and following strong moral principles irrespective of a business situation. This includes being truthful, transparent, and consistent. For example, staying away from deceptive marketing or financial reporting.

2. Fairness

Treating all stakeholders, including employees, customers, suppliers, and competitors, equally and without discrimination. This includes offering the same opportunities to everyone, irrespective of their race, gender, or background.

3. Accountability

Taking responsibility for all business decisions — no matter their consequences — good or bad. For example, recognizing and fixing errors in a product or service.

4. Respect for Stakeholders

Acknowledging and respecting the rights and interests of all those affected by the business, like employees, customers, investors, and the community. For instance, offering a safe work environment and fair pay.

5. Transparency

Operating in an open and clear way and providing honest and accurate information to all stakeholders. For example, informing investors about financial performance and potential risks.

6. Compliance with Laws and Regulations

Following all relevant legal standards and avoiding any illegal activities.

You might be wondering if legal compliance should be an ethics’ pillar — after all, it’s not a company choice but a necessity. I believe it should. Many local and global regulations prevent businesses from engaging in illegal and unethical behavior. They help companies take a stance on important topics like equal opportunities and data privacy.

7. Sustainability

Running a business in a way that minimizes its negative impact on the environment and society. This is one of the newer principles, which became particularly important with global and local net-zero pledges. The goal of this principle is two-fold:

• It ensures that the organization helps preserve resources for future generations.
• It prevents any “greenwashing” attempts within the business and secures it from reputational damage.

8. Loyalty

Being faithful in commitments made to customers, employees, and other stakeholders, while also avoiding conflicts of interest.

A great example can be respecting confidentiality in client relationships — not only because the contract requires it, but also to show integrity and retain trust.

9. Empathy

Understanding and addressing the needs and concerns of stakeholders with compassion and consideration. This shows respect towards everyone who makes up the business as well as its clients.

For example, you could show your pledge towards empathy by supporting employees and customers during economic downturns.

10. Commitment to Excellence

Striving for high-quality performance and constant improvement in all aspects of business operations. This is an umbrella term for a number of approaches, like regularly upskilling your staff, auditing your existing processes, or constantly exploring new technologies that can make you more competitive and ethical.

How to Build an Ethical Business

So, how to make sure you run your business ethically? I’ve asked a few experts to share their thoughts.

Make transparency your priority.

First of all, it’s absolutely necessary to keep transparency at the top of your mind and let it guide you in all your actions. Being transparent should keep you out of trouble — after all, if you’re not doing anything wrong, you won’t have anything to hide.

Joy Aumann, a licensed realtor (CIPS), interior designer, and founder of LUXURYSOCALREALTY, told me that she made it a priority to be transparent and make sure clients know exactly what they’re stepping into. Whether it’s discussing a property’s features, its potential, or even its limitations, being upfront builds trust and prevents future surprises.

“I’ve had buyers appreciate that I’ll walk them through every detail, from disclosures to local market insights, without glossing over anything. For example, I once worked with a client purchasing a coastal home. Instead of focusing solely on its beauty, I outlined details about flood zones and long-term upkeep costs. They valued the transparency and said it gave them confidence in their decision,” Aumann said.

David Hunter, the founder of Local Falcon, also agrees that ethics in business mean being upfront with people, even if it makes you uncomfortable.

“Early on, I worked with a small business that wanted quick results from SEO. Instead of selling them a dream, I broke down the process honestly — how rankings take time, what they could expect, and why shortcuts would hurt them later. They stuck with us because we were clear from day one. That experience reinforced how far transparency goes in building trust,” said Hunter.

Embed “doing the ‘right’ thing” in your culture.

This approach, as Dominick Tomanelli, CEO of Promobile Marketing, told me, is all about making the right, ethical choices feel like second nature for your employees. Naturally, this isn’t something that happens overnight. Like all habits, it takes time and practice to know straight away how to reflect your company’s values consistently, even under time pressure.

“At Promobile Marketing, we started with a clear code of conduct, shaped with input from our team. This involvement gave everyone ownership over our values,” Tomanelli said. He also underlines that — even with the best ethical guidelines in hand — you might be caught off guard in a new situation.

That’s why the team at Promobile Marketing regularly meets to hold discussions about the ethical dilemmas they come across. “This allows us to learn from one another,” he added.

Make ethics part of your values.

This one probably won’t come as a surprise. If you make ethics part of your values, then those who are part of the business will feel more obliged to follow them. Mark Hirsch, Personal Injury Lawyer at Temple & Hirsch, suggested starting with distinct, actionable values to guarantee that operations are founded on ethical principles.

“Integrity, transparency, and accountability are the guiding principles of all interactions at our firm, from managing team dynamics to resolving client cases. To guarantee impartiality in legal proceedings and prevent conflicts of interest, we implement rigorous compliance protocols,” added Hirsch.

Stay true to your values.

Walking away from an attractive deal for the sake of staying true to your commitments is, arguably, the biggest test for your business ethics. The leaders I spoke to repetitively told me that no amount of money is worth compromising the integrity and trust they’ve built.

“Over our 20 years in business, we’ve faced situations where honesty was at stake,” admitted Jessica Munday, CEO and founder at Trio Solutions. “Once, we encountered a real estate developer whose practices raised red flags. Despite the potential revenue, we trusted our intuition and ended the partnership.”

Munday told me that walking away from an unethical opportunity ultimately makes you feel relieved, as you know you’ve made the right choice.

Ricardo Batista, co-founder and CEO at FidForward, agrees with this approach. He told me, “Never bend your policy, even for paying customers — like Apple’s firm stance against government pressure.”

He said that his company, which offers an employee feedback platform, recently faced pressure from one of its clients.

“They requested access to private feedback data from a problematic case, seeking to justify an employee’s dismissal,” Batista said. “We firmly refused to break our privacy promise, even at the risk of losing the contract.”

He explained to the customer that violating this policy would destroy the platform’s credibility and prevent honest feedback from all future users — not just for theirs but also for other companies.

“Fortunately, the customer understood our position and respected our commitment to privacy,” Batista added.

Lead by example.

I’m sure that, based on the previous tip, you can see that business ethics start right at the top. Naturally, not all decisions will take place with the involvement of department leaders or even the C-suite. Yet, the most lucrative opportunities on the table most probably will.

“Ethical operations truly start and end with leadership, because we set the tone for everything that happens in our daily operations,” said Elisa Montanari, head of organic growth at Wrike.

Montanari notes that companies have codes of conduct, and leaders need to model those behaviors – or even go beyond them. Your staff needs to see that your actions are fair and transparent and that you’re accountable in every interaction. The actions of a leader flow down to every single employee.

Montanari also underlined that you need to be strong enough to admit that you’ve made mistakes — ideally, as soon as possible. “Even before taking the steps to correct them,” she added.

Ensure transparency in pricing.

This is an absolute-must have, as — in my experience — operating on the basis of a vague pricing plan can lead to irreversible damage.

In the mid-2000s, I was part of a team that reached out to the company’s existing customers, offering them a free trial of a new tool. We presented the costs of a monthly plan but reassured them that the contract would not auto-renew after the free trial period had ended.

Unfortunately, that was not the case, and even we as the customer-facing team weren’t aware of this fact. I don’t have information on how many clients the company lost due to this situation. Yet, I remember how unhappy most of them were when they reached out to complain about their credit cards being charged.

On the flip side, if you can lay out each and every term and condition for your offer, you can quickly gain market trust. That’s the case of Eyeglasses.com, as Mark Agnew, the company’s founder and CEO, explains.

“In my experience, strong ethics need to be a central part of a company’s culture. As the CEO of Eyeglasses.com, I‘ve always prioritized transparency in our pricing, making sure customers understand what they’re paying for. There’s no hiding or misleading — customers can access high-quality eyewear without being trapped in high-cost insurance plans,” Agnew said.

He told me that the best example of how much transparency can play out in your favor is his company’s NewVision Benefits Plan.

“We launched it to provide affordable and transparent vision benefits directly to corporations,” Agnew said. “This ethical approach has not only differentiated us from our competitors but also enabled us to build long-term trust with our customers.”

Foster a conversation about ethics with your team.

Your team needs to know what being ethical means to the business and how it impacts their jobs. This includes telling them what’s deemed unethical.

Bob Schulte, CEO at Bryt Software, told me that they hold workshops with their engineering teams twice a year to ensure responsible innovation remains a cornerstone of their work.

“During one session, an engineer raised concerns about how an update to Bryt’s Document Management feature might impact user privacy. This sparked a meaningful discussion that ultimately led us to design a more transparent solution and utilize Azure’s advanced tech stack,” said Schulte.

Moments like these remind him why fostering open conversations is so important and that’s exactly what he recommends. The company is also looking to leverage AI tools that will guide ethical decision-making in real-time, helping them evaluate choices through the lens of their core values.

Embed transparency into your supply chain.

I’ve mentioned earlier that it’s important that transparency guides all business decisions, and this also applies to the supply chain. CellaBeauty’s operations are grounded in ethics.

The company’s Director of Operations, Rachel Lynch, said that “one pivotal moment came when we partnered with a new raw material supplier. During an audit, we discovered gaps in their labor practices. Instead of terminating the partnership immediately, we worked collaboratively to help them implement fair labor standards, ensuring workers were paid and treated fairly.”

Thanks to this approach, the company was able to uphold ethical commitment while fostering growth for the supplier.

“The team learned that ethics isn’t just about policies and creating real-world impact. Transparency in sourcing, producing, and communicating has strengthened trust with our customers and internal team, reinforcing that doing the right thing always pays off,” she added.

Build and share data usage dashboards for your employees and stakeholders.

Arne Helgesen, CTO at Sharecat, shared with us a tip that he thinks is unconventional — to implement transparent data usage dashboards that allow employees and stakeholders to see how their data is being used and protected.

According to Helgesen, this not only promotes ethical operations but also creates trust within the organization and outside of it. As an example, Helgesen recalls consulting for a mid-sized engineering business. Rolling out AI technologies for operational efficiency raised data security and employee privacy issues.

“Together, we developed a dashboard that displayed real-time insights into how their data was being processed, anonymized, and stored. This transparency reassured employees and partners that their privacy was respected and eliminated rumors about unethical data practices,” said Helgesen.

This resulted in a 35% increase in employee involvement in just six months and allowed the firm to avoid potential legal issues by cultivating an ethical and transparent culture.

Business Ethics = More Than Just Following the Law

As many of the leaders I spoke to told me, being ethical in business not only protects you from reputational crises and legal fees. It also lets you sleep well at night, as you know that all the decisions that you’ve made in line with your ethics were a good choice.

I believe that any company, regardless of size, should refer to the ten principles I’ve listed. They cover all potential scenarios and stakeholder perspectives. Ultimately, we all want to be in business with ethical companies — customers want to buy from them, and talent wants to work for them.

Trying to get in on the AI boom probably feels a bit like traveling to California in the 1840s to get your hands on some gold.

Ok, sure, maybe that’s an exaggeration, but I can see why entrepreneurs might find it daunting to come up with an AI business idea at the moment since many others are doing the same.

There‘s nothing to fear, though, because, spoiler alert, there is still space for you to take your claim. In this piece, I’ll review the current state of the AI market and share a few AI business ideas for entrepreneurs interested in entering the AI world.

Table of Contents

• The AI Startup Market in 2025
• AI Business Ideas
• Are there too many AI startups?

The AI Startup Market in 2025

Recent research found that AI adoption increased by 44% in 2024, jumping to 72% after sitting comfortably at 50% for six years. Another survey found that 79% of corporate strategies think technologies (including AI) will be critical to their success over the next two years.

What’s more, the AI market grew to more than 184 billion USD in 2024, up from 50 billion in just 2023—that’s a 268 percent increase.

I’m not surprised by these stats, and they only mean one thing: AI is booming.

How Companies Are Currently Using AI

AI usage varies across industries, departments, and even among individual users.

Overall, our HubSpot research shows that generative AI is one of the most common applications of AI, especially among marketers who use it for content creation and salespeople (who say generative AI is their most leveraged tool).

Other organizations report regularly using generative AI for tasks like content support, identifying leads, and personalizing experiences.

Consumers can also use generative AI for personal needs. For example, I could use Claude to help me brainstorm title ideas for this blog post, and then use it to help me plan my next vacation.

Other popular use cases for AI across different industries include:

• Customer service teams using chatbots and virtual assistants to handle routine and repetitive customer inquiries.
• Ecommerce and retail businesses using algorithms to learn consumer preferences and offer personalized shopping and browsing experiences.
• Financial institutions using cybersecurity tools to detect and prevent network threats in real-time.
• Healthcare providers using AI for medical imaging and analyzing patient health records for accurate treatment and diagnosis plans.

AI Business Ideas

I promise that this is my last historical reference, but people have said that the current AI boom will have similar effects to the industrial revolution.

And, if I’m remembering my high school history correctly, an AI “industrial revolution” means a significant business opportunity for you, an entrepreneur, to launch an AI business.

If you want to get a slice of the AI market cake, take a look at this list of 13 AI business ideas I’ve come up with and see what piques your interest.

Note: These are not fully developed ideas. If you find one of interest, use my outline as a baseline for all the other starting-a-business requirements.

1. AI-powered Local Business Assistant

Your AI-powered local business assistant helps small businesses automate routine practices, freeing up time to focus on building relationships with local clientele. Business-specific intelligence can also help with customer service, inventory management, and localized marketing tips.

Why It Works: I think this AI-business stands out from the crowd because existing tools that offer similar features can come with a higher price point, which doesn’t cater to the smaller-scale needs of local businesses.

2. Dynamic Education Platform

Personalization is the best way to offer AI to the education system, and your dynamic education platform could personalize the learning process by identifying learning gaps, offering real-time pace adjustment, and giving parents and teachers dashboards for progress tracking.

Why It Works: Educational institutions have continued to offer the hybrid learning models that arose during the pandemic, but it can be challenging to keep learners on track if they’re not in a classroom. This business meets the needs of those looking to provide the same level of education, regardless of where a student is.

3. Legal Research Assistant

An AI-powered legal research assistant uses algorithms trained on historical legal data to help professionals search for and quickly find the case law, statutes, and precedent data they need to be successful at work.

You can set yourself apart from other businesses (and general generative tools) by catering to specific legal fields (like corporate law, tax law, fraud, etc.)

Why It Works: Lawyers and attorneys spend significant time researching case law and finding supporting precedence for their cases. You’d give people time back with a trusty sidekick that helps quickly find what they need.

4. Fashion Design Assistant

This tool uses historical data (trends, fashion images, patterns, etc.) and social listening to uncover current cultural conversations to give trend predictions and identify business opportunities. Focusing on a specific fashion vertical will set your business apart from companies or tools that offer similar functions.

Why It Works: Traditional trend research requires sifting through a significant number of sources and can be time-consuming. This tool is a fashion expert’s trusty sidekick, and it surfaces patterns, trends, and suggestions faster.

5. Content Localization Tool

Your AI-powered content localization tool helps businesses adapt content across cultures and languages. It can offer dialect-specific translation, market messaging localization, and context-aware translations.

Why It Works: Every business that hopes to expand its global reach needs to accurately communicate with audiences, beyond simple translation.

6. Construction Project Optimizer

With this business, you’d offer a tool that analyzes building plans and to help identify potential issues before construction begins, optimize resource allocation and scheduling, and automate progress reporting for stakeholders.

Why It Works: Delays that cause productivity issues are a significant pain point for the construction industry, and technological solutions can help contractors, architects, and all relevant stakeholders optimize their strategies.

7. Restaurant Operations Assistant

Your AI-powered platform for restaurants helps streamline and automate tasks like inventory ordering and ingredient needs, market informed menu pricing, and staffing recommendations based on past customer flow.

Why It Works: Restaurants can operate on thin margins, so a tool that helps optimize spending and staffing needs can help managers and owners make the right decisions and better serve customers.

8. Patient Scheduling Tool

An AI-powered scheduling system uses historical appointment data (from patients and providers) to optimize scheduling and time slot allocations.

Why It Works: Manual appointment scheduling is prone to human error. An algorithm trained on medical provider or provider office appointment history wastes less time for patients and providers.

9. Route and Logistics Planner

Sellers want buyers to get their products in a timely manner, but shipping interruptions can prevent that. This tool optimizes logistics by analyzing historical trip data to suggest the best routes, track progress, and ensure timely deliveries to help sellers meet customer expectations.

Why It Works: Regular GPS systems monitor traffic patterns and give route adjustments, but this tool focuses on the needs of truck freight shipping and gives suggestions and recommendations that follow truck roads.

10. Personalized Guest Management

Your reservation management tool generates personalized recommendations for hotel guests and uses predictive analytics and individual preferences to suggest booking adjustments.

Why It Works: Hospitality faces ever-increasing customer expectations, and this tool helps you help businesses meet personalization desires.

The ten ideas I just went over incorporate AI into the service you offer customers.

The next three are still AI business ideas, but AI plays a greater part in helping you with your day-to-day operations, rather than being a customer-facing tool.

11. AI Support Agency

An AI support agency helps businesses identify areas where implementing AI will streamline processes and save time. You can dive into their workflows, pinpoint where automation can be helpful, and help create usage and best practice documentation so all employees understand how and when to use their tools.

Why It Works: A challenge businesses face with AI adoption is understanding how and where to implement it. With this business, you’ll help organizations overcome this challenge — you just have to figure out what industry you want to work in.

12. AI Training Data Provider

For this business, you’d help companies process, categorize, and clean up the training data they’d need to build their own AI tools (like a custom GPT). For example, if a regional healthcare network is creating a custom tool for coding medical procedures, you can analyze its historical data, clean it up, and format it so it’s optimal for AI training.

Why It Works: A bottleneck to AI adoption is having quality training data. As more and more businesses look to adopt AI into their workflows, you’re poised to meet that need. To stand out from the crowd, I recommend choosing a select few industries to operate in so you can have the focused expertise that high-performing AI businesses need.

13. Synthetic Data Provider

With this business, you’ll use AI to create synthetic data sets that mimic the real-world data sets companies use to gain critical insights, improve the performance of their own AI tools, and collaborate with stakeholders.

Why It Works: All businesses rely on data to run their operations, so providing synthetic data helps them do so while maintaining compliance and prioritizing data privacy. If you go this route, I recommend selecting a specific industry you’ll support because this type of specialization will set you apart from competitors.

Are there too many AI startups?

So, you have an idea for an AI business, but now you’re wondering; are there already too many AI startups out there?

My answer is no—there aren’t too many AI businesses, there are just too many general AI businesses. For example, there are many tools that aren’t too challenging for multiple businesses to create (like image generators), so there are a wide variety to choose from.

What there is a lack of is specialized solutions. Tools that serve a specific purpose or industry aren’t as common, which is exactly where the untapped potential lives for entrepreneurs. (This is why I mentioned the importance of having a specialized focus in most of the ideas I listed above.)

When it comes down to it, what makes high-performing AI startups (now and in the future) high-performing, are elements like:

• Founders and teams that have domain expertise and a comprehensive understanding of the niche they’re serving so they can clearly identify pain points and build solutions that meet those needs.
• Unique and proprietary algorithms.
• A novel technical approach.
• Access to unique or specialized data sets that bring a competitive edge.

If you want to launch your own AI business, my top recommendation is to dive deep into an industry you’re knowledgeable about. You’ll have an easier time identifying and filling gaps in the market. Being well informed in the industry you’ll operate in also builds credibility—you wouldn’t ask a mechanic for help with a root canal, right?

If the niche you’re interested in is more saturated, focus on specialized solutions that nobody else offers. Lock in on one or a few specific use cases where you can outshine your competitors.

Over to You

It’s clear to me that the AI market will only continue to grow. If your next entrepreneurial move is an AI business, your path to success is finding a key differentiator to set yourself apart.

The best AI startups will focus on solving a specific problem and meet a clear and unique market need.