Pricing from what the problem costs
Looking at competitors gives you a plausible number and never the right one. The only useful reference is what the problem costs the person living with it, and it sits in your calls.
The most common way to set a price is to look at what others charge, then sit slightly below. It has two advantages: it is quick, and it requires speaking to nobody.
It has one flaw that cancels both. A competitor sells something else, to someone else, on a cost base you know nothing about. Their price says nothing about what your offer is worth; it says what they decided.
A price is not deduced from what it costs you to deliver, nor from what others ask. It is deduced from what the problem costs the person living with it.
The only figure that works as a reference
Before naming a price you have to be able to answer one question: how much does this person lose every month because of the problem you solve. Until that figure exists, no price is defensible, yours or anyone else's.
That figure takes three forms, and most offers use only one.
- Time lost. Hours spent on something that should not take them, multiplied by an hourly cost.
- Revenue that does not arrive. Deals lost, follow-ups never made, customers leaving without anyone knowing why.
- A risk that costs when it lands. Rare, expensive, and often the most convincing of the three when the person has already lived it.
The second is the most powerful and the least used, because it requires making someone say a number out loud. That is exactly what a discovery call is for.
Where to find it
Not in a study, not in a spreadsheet. In what your customers said before signing, while describing their situation without knowing they were handing you your price.
| What the person says | The figure inside it |
|---|---|
| I spend my Fridays on this | One day a week, roughly twenty percent of a salary |
| We lost two big accounts last year | Twice the average deal, a number they already know |
| We follow up when we remember to | The share of pipeline that dies from no follow-up |
| I hired someone for this | An annual salary, the hardest reference to argue with |
The last row deserves attention. When someone has already hired to solve the problem, they have already accepted a price, and it is far above yours. That is the strongest reference you will find.
From the cost of the problem to the price
Once you hold that figure, the price stops being an arbitrary decision and becomes a ratio. It has to sit clearly below what the problem costs over the period in which you promise a result, otherwise the buyer cannot make the trade-off at all.
Clearly, not slightly. A price that eats nearly all of what the problem costs asks the person to bet with no margin. A price that is a fraction of it leaves a visible difference, and that difference is what makes the decision.
A price built by comparison
- Aligned on a competitor selling something else
- Justified by the time you spend
- Cut at the first hesitation
- Impossible to defend except by comparison
A price built on the cost of the problem
- Set against what the person loses today
- Justified by a number they gave you themselves
- Held, because it rests on something beyond your feeling
- Defensible in one sentence, without naming anyone else
Presenting the price
A price is not a number you drop at the end. It is the last line of a reasoning, and the reasoning has to come first, otherwise the figure arrives alone and gets compared to nothing.
- Restate the observed cost in the person's words, not yours.
- Name the price without commenting on it. A price you over-explain is already being defended.
- Leave the silence. That is the moment you learn which case you are in.
- Do not offer a discount before being asked. Volunteering one says you never believed it.
The third point is the hardest to hold and the most informative. The silence after a price lasts a few seconds and says a lot: an immediate objection is not the same thing as hesitation, nor as a request for a smaller version.
Where Meidly helps
We surface from your calls what your customers describe as lost: time, deals, a role created to compensate. It comes back into your offer with its original phrasing, and that material is what makes your price defensible without citing a competitor.
See how offers work→In short
Find what the problem costs first, monthly, with a number that came from the person. Put your price clearly below it over the period in which you promise a result. And present it as the conclusion of a reasoning, not as a piece of information at the end of a meeting.
Frequently asked questions
How do you set the price of a service?
By starting from what the problem costs the person, not from what it costs you to deliver nor from what competitors ask. Find the amount lost each month, in time, revenue or risk, then put your price clearly below it over the period in which you promise a result.
Should you match competitors' prices?
No. A competitor sells something else, to someone else, on costs you do not know. Their price says nothing about the value of your offer, only about their own decision. Comparison gives a plausible number, never the right one.
How do you justify a high price?
With a figure the person gave you themselves. You told me you spend a day a week on this beats any argument you could build. The strongest reference is someone who already hired to solve the problem: they accepted a price far above yours.
When should you name the price in a meeting?
After quantifying the cost of the problem, never before. A price named early is compared to nothing and always sounds high. Once the cost is established, the same number becomes a ratio, and a ratio is discussed differently.