pricing persuasion

Value based pricing is a super power.

Don’t assume (whatever you do) just to be the cheapest unless your being very deliberate in your strategy. You are young. You think $1000 a week is a lot. Seasoned professionals can easily get $2000, $3000 a day if they have skills and capabilities.

Nothing screams junior burger more than someone who doesn’t understand pricing.

Here is why pricing matters:

You want your pricing to reflect the value you create, not just being the cheapest.
If you have no brand, you cant pitch a high price (necessarily) unless you have something of value.
If you deliver transformative value - clients will come back no matter the price if they see the value.
Pricing for value sets you up for long term success as sales in future will be easy. The success is demonstrated.

This section provides techniques to quantify, sell value, and provide clear explanations of what each strategy is and the psychology behind why it works.

Identifying value

Everybody is a potential client.

Everyone has value you could untap - you just need to dig it out.

Here are some techniques to find and quantify value to justify your price.

Looking under the iceberg

In any transaction there are surface needs (features), submerged needs (outcomes) and hidden value (opportunities or risks to avoid)
Clients will focus on the obvious problems, but often 90% of the value lies in deeper outcomes (the iceberg effect). If you can reveal that hidden value - you tap into a desire completely different than the straight forward service they wanted to buy.
Example: “You want a logo, but a full brand identity could boost sales by 20%.”

Understanding the pain and gain and risk value spectrum

There are two frames in every transaction. The pain the product or service solves for, and the gains created and the risks mitigated.
People are loss-adverse, often fearing pain more than the gains they seek.
If you can reframe all three dimensions persuasively you can shift them from emotional triggers to logical buy-in vectors.
Example: “My coaching solves burnout, unlocks productivity, and prevents turnover.”

Looking at the Time-Money-Energy triangle

Every transaction can be viewed through a prism of time saved, money gained and stress reduced by buying something.
People value efficiency and peace of mind. This appeals to the effort heuristic, making the solution feel essential.
Example: “Build the client a solution that tangibly saves them time in their day”

Frame outcomes as a before and after

Show current costs vs. future benefits to highlight the transformation gap.
Contrasting pain with potential triggers the contrast effect, making your price seem small compared to the gap.
Example: “Your current site loses $10K monthly—my redesign could earn $50K.”

Frame outcomes in a stakeholder lens

Identify value for each decision-maker (e.g., CEO, CFO, team).
Different stakeholders have unique needs. Addressing them all leverages the inclusivity bias, ensuring buy-in.
Example: “My marketing plan boosts revenue for the CEO and streamlines work for the team.”

Cost of inaction investigation

Ask what not solving the problem costs.
Loss aversion makes inaction feel riskier than action, pushing decisions.
Example: “What’s it costing you each month to keep this outdated website?”

Opportunity cost exploration

Highlight missed opportunities due to the problem.
FOMO drives action—people want to seize potential gains (the scarcity effect).
Example: “What could you achieve if your social media was driving leads?”

Multiplier effect analysis

Show how one solution impacts multiple areas.
Systemic benefits feel bigger, appealing to the holistic value bias.
Example: “Fixing your branding boosts sales, retention, and team morale.”

Competitive impact assessment

Frame your solution as a competitive edge.
Fear of falling behind competitors triggers urgency (the rivalry bias).
“If competitors optimize their site first, they’ll steal your market share.”

Future-pacing value discovery

Paint a picture of their success one year out.
Visualising a better future creates emotional buy-in (affective forecasting).
Example: “Imagine a year from now with double the leads,, how would that feel?”

Raw revenue impact

Quantify sales or market share gains.
Concrete numbers appeal to the evidence bias, building trust.
Example: “My campaign could generate $100K in new sales.”

Cost savings quantification

Calculate direct and indirect savings.
Saving money feels like a win, satisfying the loss aversion bias.
Example: “My automation saves you $20K yearly in labor costs.”

Efficiency gain measurement

Convert time savings to dollar value.
Efficiency appeals to the effort heuristic, valuing time.
Example: “My tool saves 5 hours weekly, worth $250 at your rate.”

Risk mitigation valuation

Quantify avoided risks or penalties.
Avoiding loss is a powerful motivator (loss aversion).
Example: “My compliance plan prevents $50K in fines.”

Strategic value assessment

Highlight long-term growth or positioning benefits.
Future-focused benefits appeal to the vision bias, inspiring action.
Example: “This rebrand positions you for $1M in growth.”

Techniques to build a Return on Investment (ROI) Case

ROI is your proof that your solution is worth the investment. These techniques make your value impossible to ignore.

ROI calculation methods

Simple ROI

(Gain - Cost) / Cost × 100%.
Clear numbers satisfy the evidence bias, making value tangible.
Example: “$50K investment, $200K gain = 300% ROI.”

Net present value (NPV)

Calculate multi-year benefits, accounting for time value of money.
Long-term thinking appeals to the strategic bias, showing foresight.
Example: “Your $50K investment yields $300K over 3 years.”

Payback period

Show how quickly they recover their investment.
Fast returns reduce perceived risk (loss aversion).
Example: “You’ll break even in 6 months, then it’s all profit.”

Internal rate of return (IRR)

Show the annual return rate of your solution.
High IRR feels like a smart investment, satisfying the profit bias.
Example: “This delivers a 25% annual return, beating most investments.”

Total cost of ownership (TCO)

Compare your solution’s full cost to alternatives.
Lower TCO feels cost-effective, appealing to the value bias.
Example: “My $50K solution costs less than $100K in-house over 2 years.”

How to structure the story in the business case

Executive summary impact

Lead with the biggest financial benefit.
First impressions anchor expectations (the anchoring effect).
Example: “This plan delivers $500K in value for a $50K investment.”

Problem-Cost-Solution-Benefit

Outline the problem, its cost, your solution, and the ROI.
A clear narrative satisfies the story bias, making your case compelling.
Example: “Your current site costs $10K monthly in lost sales—my redesign delivers $50K.”

Conservative-Realistic-Optimistic Modeling

Show minimum, likely, and best-case ROI scenarios.
Multiple scenarios build trust by addressing risk aversion.
Example: “Worst case: $100K return; likely: $300K; best: $500K.”

Risk adjusted ROI

Factor in risks and probabilities.
Acknowledging risks satisfies the transparency bias, building confidence.
Example: “Even with delays, you’ll see 200% ROI.”

Comparative investment analysis

Compare your ROI to other options like hiring or marketing.
Superior returns appeal to the opportunity bias, making you the best choice.
Example: “My $50K plan outperforms a $100K ad campaign.”

The holy grail of business: outcome-based pricing models

This model is a unicorn seldom agreed to. But you’re young. Why not make outrageous (factual claims) and put the risk on yourself to deliver - into markets where the client is unsophisticated due to new technology.

This is perhaps the most powerful way to stop selling hours - and start selling results.

The models to think about this:

Performance based fees

Base fee plus a bonus for results.
Shared upside reduces risk, appealing to the fairness bias.
Example: “$10K base + 15% of revenue increase.”

Success fee model

Payment only if results are achieved.
Zero upfront cost feels risk free, satisfying loss aversion. This can be a risky strategy - and also be sure you can measure the outcome.
Example: “Pay $50K only if I boost sales by 20%.”

Gain sharing agreement

Share a percentage of financial benefits.
Long-term partnerships build trust, leveraging the reciprocity bias.
Example: “I get 20% of cost savings for 2 years.”

Milestone based pricing

Payments tied to specific achievements.
Incremental wins build confidence, satisfying the progress bias.
Example: “$5K per 10% increase in leads.”

Value based retainer

Monthly fee tied to ongoing value.
Predictable payments feel manageable, appealing to the stability bias.
“$5K/month, adjusted for performance.”

All pricing models require us to define outcomes and have clear measurements for them

Here are some models you can use to define outcomes in a measurable way:

SMART outcomes

Define Specific, Measurable, Achievable, Relevant, Time-bound goals
Clear metrics satisfy the clarity bias, reducing disputes.
Example: “Increase leads by 20% in 3 months.” - it is clear

Measure both Leading and Lagging Indicators

You need to track early progress (leading) and final results (lagging).
Early wins build trust, leveraging the momentum effect.
Example: “More clicks now predict higher sales later.”

Baseline establishment

Document current metrics before starting.
A clear starting point ensures fairness, satisfying the trust bias. Just make sure OTHER things aren’t introduced that could pollute your baseline.
Example: “Your current site has 1K monthly visitors—let’s measure from there.”

Define your Attribution Methodology

Define what results come from your work.
Clear causation prevents disputes, appealing to the fairness bias.
Example: “My campaign drove 80% of new leads, verified by analytics.”

Create a outcome verification system

Use third-party tools or audits to confirm results.
Transparency builds trust, satisfying the evidence bias.
Example: “Google Analytics will verify your traffic increase.”

Now lets master pricing psychology

Price is perception - and you can use all of the vectors above as frames to have discussions about pricing, and it really depends on the situation. You could use this content to build an agent to help you price something pursuasively. In the past, these techniques were the domain of expert consultants. But AI knows them all. So use this to help vector yourself.

These techniques use cognitive biases to make your prices feel fair and compelling.

Cognitive bias exploitation techniques

Anchor your conversation

As funny as it sounds - the opportunity cost of working with or for someone is just as important as the cost you charge. So you want to set an anchor point of what else you could be doing. So when you pitch something, it seems reasonable.
The first frame or price sets the expectation of where you want to go with this deal.
Example: ‘Typical solutions cost X, but I’ll do it for nothing, and share the benefits with you”

Create pricing decoys

You might want to pitch three options, and skew the user to where you want them to go, based on their preferences.
E.g. you might want to offer a cheap price, and show relatively higher prices. Or offer way more value in a moderately higher price to get the user to pay it.
Decoys make people feel better in their compromise.
Example: “Basic ($10K), Premium ($50K), Elite ($100K)—most choose Premium.”

Loss aversion pricing

Frame price as avoiding loss, not spending.
People fear loss more than they value gain (loss aversion).
Example: “Avoid $200K in lost sales for a $50K investment.”

Social proof reference pricing

Show others paying similar prices.
Peer behavior justifies costs (social proof).
Example: “Brands like [client] invest $50K for these results.”

Scarcity and urgency pricing

Highlight limited availability or time-sensitive deals.
Scarcity creates FOMO, driving action (scarcity effect).
Example: “Only 3 spots left at this price.”

You can also use price presentation and packaging communication techniques to lesson fear and spark buying

The common techniques here are:

Price bundling

Bundle services to increase perceived value.
Bundles feel like a deal, satisfying the value bias.
Example: “Get design, ads, and analytics for $50K, worth $80K separately.”

Payment term psychology

Break payments into smaller chunks.
Smaller payments reduce pain (the partitioning effect).
Example: “$50K annually feels like $4,200 monthly.”

How to expertly handle price objections

#1 point here.

Not all deals you want.

I did a pricing analysis of a tire distributor. We found that 80% of their customers were costing them money. By simply saying no, we were able to massively improve their profit position, and invest in the profitable relationships to get the revenue back up.

The first point here, is the best objection is one that never comes up.

But if they do, here are some techniques to mitigate them.

How to prevent objections in the first place

Pre-empt the objections

Frame the value before you frame price

Build value before mentioning price. People need to understand it.
High value overshadows cost (anchoring effect).
Example: “This saves $500K—our $50K fee is a fraction of that.”

Investment Reframing

Call price an “investment” tied to results.
Reframing shifts focus to returns, satisfying the profit bias, but you also need to address the credibility risk point.

So you can introduce the Risk Reversal

Offer guarantees to eliminate risk.
Risk-free options satisfy loss aversion, building confidence.
Example: “If we don’t deliver, you get a full refund.”

Then how to specifically deal with objections

The customer says the price is too high on the basis of value comparison

Turn it around and show the value for the cost
If the value dwarfs the cost, its hard to argue
Example: “$50K feels high, but it generates $500K in revenue.”

The customer indicates they don’t want to take action for some reason

Show what inaction costs.
Loss aversion makes doing nothing feel riskier.
Example: “Doing nothing costs $10K monthly—my $50K fixes that.”

The customer is thinking about alternatives

Compare your approach to theirs
Give them the context and contrast
Example: “Hiring in-house costs $100K—my $50K is a better deal.”

The client has no budget

Attempt to show how the savings fund themselves
Self funding feels achieveable, satisfyuing the practicality bias
Example: ‘This will save 20k quarterly, and it only costs 20k’

The budget is not a priority:

Highlight how little the client will have to do.
Offer to do the admin. Start slower or small. You need to get started. And frame it in the potential.
Example: “If this doubles sales, how would budget priorities shift?”

I cant afford it in one hit:

Break the project into smaller more managable chunks
Smaller steps feel manageable, satisfying the progress bias.
Example: “Start with $10K for phase one, which generates $40K.”

Conclusion: Pricing is a matrix you need to figure out

Feed this content into AI, and also give it what you’re trying to sell or do and run some scenarios. In the old days you had to be an expert at this stuff to do it. People would pay consultants to come up with pricing strategies. Work with AI agents to figure it out. You’ll be shocked what’s possible.

And remember the principles of pricing apply to any negotiation. It could be what you’ll do and negotiating what other people will do. There could be no exchange of money and the above tactic logic could be applied to any negotiation. Think about it.