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Eric Siu explains value-based pricing in three steps: quantify what your customer wants to achieve, charge a percentage of that value (like 10% of a $1M goal), and offer tiered pricing based on their desired outcome.
Eric Siu explains value-based pricing in three steps: quantify what your customer wants to achieve, charge a percentage of that value (like 10% of a $1M goal), and offer tiered pricing based on their desired outcome.
Most people suck at pricing, but it's one of the biggest levers that you can pull when you're trying to grow your business. So here's how you do it. Number 1 is to attain the value of whatever goal it is that they're trying to hit. So you say, Mr. Customer, what is the value of trying to hit your goal? And they say, well, it's about $1 million or so. Well, you say, hey, if I am able to hit that goal, would it be fair to pay us 10% of that? So $100,000. And they would say yes, if you can guarantee it, right? Number 2, you want to future pace. So ask them, in 3 years, what would have had to happen for us to be hanging out in 3 years? And you can figure out all the things that they wanna see. Number 3, last but not least, comes back to the first question. You create a small, medium, large pricing option based on the initial value. And then from there, you're able to charge a lot more because you have now tailored the conversation around value. So,
