Daniel FazioCo-Founder of Client Ascension & ListKit

How to price your products & services

27 Dec 2022 · 1 min

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A short excerpt from Daniel Fazio's YouTube video 'How to price your products & services' (Dec 27, 2022). Fazio offers a simple pricing heuristic: charge clients only when you can deliver an asymmetric return—illustrated by a 5x rule (if you charge $5,000 you should generate about $25,000 in value). He uses advertising agencies as an example: if your ads can't produce a five-times return, you shouldn't charge a fee that implies that level of expected value.

Chapters

Here's a good barometer with which I like to price products and services, right? So you have to imagine that when you are selling something, you're selling it to a client, and the client wants to make an asymmetric return. What you give them has to be worth more than what they give you, right? So if you're charging somebody $5,000, you should probably be able to generate them $25,000 of value. And as a more direct measure of this, let's say you're like an advertising agency or something like that. You make ads for people. If the ads you make can't get the client a five times return, then you don't deserve that X amount of money. If you want to charge $5000, you better be able to make them 25,000.