How to Message Your Price

Today, we’ll make pricing a bit easier on you.

A founder once told me that deciding on a price and asking customers to pay it felt like like what they’d imagine showing up at the pearly gates felt like. The ultimate judgement day.

Pricing is…emotional.

Founders tend to underprice their service because who the heck are they to charge you money for a thing they built? Also, what if that price offends someone? Or scares them off? And then you fail and everyone in your hometown finds out and your family disowns you? Again, pricing is emotional.

There’s a famous interview where Marc Andreesen is asked about what he’d put on a billboard that entrepreneurs had to pass on their way to work each morning and he answered, without hesitation, “charge more,” and I agree.

This might seem like it’s only relevant after you’ve got a product, but it’s incredibly important before. We have to test pricing to see what people will pay before we build anything. Price comes before product because it informs what we build.

We combat charging too little and getting to the right price pre-product through things like Value Based Pricing, but there’s another approach that’s really helpful. And it involves just describing what you’re charging for in a way that isn’t terrible.

Roughly 99% of companies are horrible at introducing and articulating pricing.

Here are two examples — these are SaaS products for podcasters:

What’s so bad about these?

They don't help us make a decision, despite the layout seeming like it would.

The main reason is that our brains don't speak feature, they speak problem. Your product is a tool to solve a problem at a specific moment in your customer's life. Your pricing is the fee you charge to take that inconvenient moment off their hands. So, for CastMagic, the second pricing example, minutes and uploads and workspaces don’t make any sense for me or help me make a decision. But this would:

Hobby: $23/mo

Problem: You’ve got a passion podcast you release 2-3x / month. You’d like to generate show notes and transcripts and tweetstorms and linkedin posts from each episode so that you can grow, but this is a side thing. You don’t have time.

Magic: We do that 👆 for you. You make episodes, we turn them into bite-sized assets that'll help your show grow. You'll have show notes and transcripts and social posts like you're part of NPR.

So: Your hobby pod can grow into something way more.

I spent 20 seconds on this, but it hits the problem, the hard thing we take off their plate, and the dream outcome. When you think about pricing, think about problem language. Here’s your problem, here’s what we take off your plate, here’s where it lets you go. The more hyper specific you get around each of the three pillars, the more people can identify with the plan and opt-in.

Now, the $23 is divorced completely from the “inputs” of features. It's $23 to make my podcast look professional and have the potential to grow. Is that worth $23? Of course. But forcing your customer to try to quantify minutes or agency support gets you into a race to the bottom. Because a competitor can just say “we offer 900 minutes.”

You win on understanding where your customer is and were they want to go, and that flows through to pricing.