How to think about pricing

Here's the 1 sentence rule:

If you're not confident, charge based on the work you do.

If you're confident, charge based on the value you generate for your client
This is exactly why most small companies charge a fixed fee per project

While most big agencies charge based on their performance.

Because they are confident about their work.
Everyone says, increase your prices

I say:

Increase your quality so much that your prices are increased themeselves.
Would you buy a $15 Fiverr website?

Of course not.

Similarly, if you start pitching $15000 websites

It'll be again very difficult to sell


What factors should determine your pricing?

How do you know if you're charging too much or too little?

Keep reading👇

Ever when to an electronic shop

Notice they have the most expensive $15k screens at the front

That's anchoring

See the Mailchimp pricing

They have the most expensive plan first

Of course, you won't buy that

But suddenly

The $15 one looks much cheaper
What would happen if they didn't have a premium plan

Instead, they had the usual:

Contact us

Then the $15 one would be the most expensive

And most people would choose the $10 one

With such a simple trick, they increased their CLTV by at least 50%
Most people are not confident enough to charge more

If you're like most people
(hint: You are)

Try to increase your initial price by at least 50%
When deciding on your pricing structure

Decide what's the minimum you will EVER charge

Your pricing should depend on how rich the prospect is

When you talk to recently funded or enterprise-level companies

Don't pitch them a $2000 retainer

That's like a $15 Fiverr website
What does that mean?

Say that you have a sales call with 2 companies A & B

Company A recently got a $12M Series A funding

They want to start SEO and luckily you get a call from them
Now obviously, you are not going to charge them $2000 a month

You can charge them $5k or $10k
So have a dynamic pricing structure and change according to the prospects

Figure out their financial situation during the discovery call

And then decide your pricing and offer
Figure out how much you are going to make them per month with your service

Now, divide that by 6 and that's your minimum price
If you're a beginner writer, you could try to charge per word or per hour initially

Because at that stage, you don't know anything about the results

As you grow, get more experience, get more results

Transition from
Charging retainers or per word or per hour

To more performance-based type deals
This way

Your & your client's incentives will be more aligned

Resulting in an overall better partnership and more money to be made for both sides.

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