The pricing conversation nobody films

Think about a product that you wouldn’t buy even if it were cheaper. Mine would probably be ice cream.

You know the kind I’m talking about. Technically, it says ice cream—or something close enough to ice cream—on the package, but you take a bite and think: what exactly are we doing here?

I like rich, creamy, delicious, cold—okay. Let me stop. This is getting too good, and now I want ice cream.

But when I do buy it, I want my brand. Period. You could make the other one cheaper. Put it on sale. Give me a coupon. I still don’t want it.

Cheaper does not automatically mean more desirable.

Pricing is positioning

You can watch a hundred business stories before you see a character sit down and carefully work out their pricing. It’s not dramatic. Nobody is buying a movie ticket to watch somebody calculate margins on a spreadsheet.

But that quiet decision can determine your margins, workload, customer experience and even who your customers become. Because your price communicates something.

Price too low because you’re nervous about losing the customer, and you may accidentally communicate what you believe your own work is worth. And once the market gets used to seeing you at a certain price, changing that expectation can become much harder.

That third question is important. Let me say it again for the people in the back.

What do I need to charge to serve my customer properly?

Because if the price doesn’t allow you to deliver the quality, service, staffing and experience you promised, then being cheaper isn’t necessarily doing the customer a favor.

Stop pricing only by the clock

This gets especially tricky for service businesses. You finish something in 30 minutes and start thinking: “I can’t charge that much. It only took me 30 minutes.”

Only 30 minutes? What about the years it took you to learn how to do it in 30 minutes? What about preparation? Software? Equipment? Insurance? Employees? Administration? Research? Follow-up? And what about the result the customer receives?

Time matters when calculating your costs and capacity. But the clock isn’t always the best measure of customer value.

Sometimes people are paying you precisely because you know how to solve in 30 minutes what might take them three weeks to figure out.

And back to my ice cream

I know. I’m hanging onto this ice cream thing. Whatever.

Think about a vanilla shake. There are times when somebody just wants something cold, sweet and inexpensive. Fine. There is a customer for that.

But sometimes I want the shake made with the real, creamy ice cream I like. If that’s what I want, making the cheaper alternative another dollar less expensive isn’t going to suddenly make me want it. If I settle for it, I know I settled.

That is positioning. The premium product doesn’t have to win every customer. In fact, it shouldn’t.

Your goal isn’t to make everybody say “that’s cheap.” You want the right customer to say “that’s worth it.”

Most underpricing is not a strategy

Sometimes a lower price absolutely is strategic. Maybe you have a cost advantage. Maybe you intentionally serve a price-sensitive market. Maybe you’re introducing a product. Maybe competitors are providing comparable value more efficiently. Those are business decisions.

But sometimes? The spreadsheet didn’t set the price. Fear did.

What if they say no? What if they think I’m too expensive? What if my competitor charges less? What if I lose customers?

Those are legitimate questions to investigate. But they aren’t a pricing strategy.

Underpricing is sometimes less of a strategy and more of a nerve problem.

Raising prices is a business decision, not a confrontation

A price increase shouldn’t be: “Everybody hold your breath. I’m about to tell the customers.”

Treat it like any other important business decision. Look at your costs. Look at your margins. Look at capacity. Look at competitors. Look at customer value. Look at demand. Look at what it actually costs to deliver the experience you’re promising. Then decide.

Some customers may leave after an increase. That does not automatically mean the increase was wrong. But don’t assume raising prices automatically improves the business either. If customers have strong alternatives and don’t perceive enough additional value, the market may push back.

That’s why pricing requires evidence, not just courage.

Five things to do before changing your price

1. Calculate what the sale actually leaves behind.
Revenue isn’t profit. Know your direct costs, overhead demands and margin.

2. Ask what you’re really selling.
Are customers buying hours, expertise, convenience, speed, confidence, quality, access or an outcome?

3. Identify your right customer.
Who values what you provide enough to pay what sustainable delivery requires?

4. Test before making a giant leap.
Try a new price with a new package, customer segment, offer or sales channel and watch what happens to conversion and margin.

5. Ask the question we avoid.
What would I charge if I weren’t afraid of hearing no? Then don’t automatically charge that number. Investigate it. Because maybe the answer reveals that you’ve been pricing from fear instead of strategy.

You don’t need everybody

Your business does not need every customer. And every customer does not need you. Somebody wants the inexpensive shake. Somebody wants the premium ice cream. There is room for both.

The important thing is knowing which business you are building, and making sure your economics allow you to deliver what you’ve promised. Because you cannot sustainably serve customers at a price that exhausts you, compromises the experience or costs you more than the business can afford.

So yes, charge a price your customer can understand. Charge a price the market can support. But also charge a price that allows the business to do its job well.

Good business tastes better at the right price.

And if somebody wants the other ice cream? That’s okay. More of the good stuff for me.