Pricing

Price does not communicate value by itself.

A buyer interprets price alongside the problem being solved, the alternatives available, the confidence they have in the provider and the scope of what is included.

That means a pricing problem is often an offer-design problem.

Before choosing a number, write down:

• the problem being solved
• the cost of leaving the problem unsolved
• the change the buyer expects
• what remains uncertain
• what alternatives the buyer has
• what your delivery actually costs

Do not turn a projected benefit into a guaranteed return.

If your work could save a customer time, reduce risk or improve a commercial process, describe the mechanism and the uncertainty clearly.

Cost tells you whether the price is sustainable.

Value helps you understand why the buyer might consider paying it.

Neither one should be used alone.

A simple pricing check is:

Sustainable price = delivery economics + commercially credible value

The exact number depends on the market, scope, alternatives and buyer.

A proposal should make the commercial logic understandable before the price appears.

Explain:

1. the problem
2. the proposed change
3. what is included
4. what the buyer is responsible for
5. what remains uncertain
6. the price
7. the next decision

This gives the buyer something concrete against which to evaluate the number.

A price increase does not automatically require adding features.

You can improve the commercial offer through:

• clearer scope
• faster delivery
• stronger support
• better expertise
• reduced risk
• better implementation
• a more appropriate customer segment

But do not use a higher price to hide a weak offer.

If customers cannot understand what changed, the increase will feel arbitrary.

Use real proposals as a learning system.

Record:

• price offered
• scope
• customer type
• objections
• accepted or rejected
• negotiated changes
• reason given
• delivery economics after the sale

Look for patterns across multiple conversations rather than changing the price after one rejection.

Do not ask only, "What should I charge?"

Ask:

What is the buyer deciding to buy, what is that decision worth to them, what does it cost me to deliver, and what evidence supports the number?

That produces a price you can explain instead of a number you are merely hoping the buyer accepts.

This article deliberately removes unsupported benchmark statistics and proprietary-study claims. It presents pricing as a commercial decision framework rather than claiming a universal percentage effect from price changes.

Related reading: \2 · \2

Harvard Business Review — Contribution Margin: What It Is, How to Calculate It, and Why You Need It. Contribution margin shows how specific products or sales contribute toward fixed costs and profit. Harvard Business Review — The Good-Better-Best Approach to Pricing. Tiered pricing can separate customer choices using meaningful feature or service differences. Harvard Business Review — A Quick Guide to Value-Based Pricing. Value-based pricing starts from customer value and alternatives, but it is often misunderstood.

Evidence boundary: These sources support the underlying principles and context; they do not prove that one universal tactic works for every founder, market or company. SOE separates source evidence from editorial synthesis.