Turn Interest Into Paid
Price against value, not your cost
Most owners price by adding a markup to their cost — a tidy formula that quietly caps your income at whatever it happens to cost you. But the customer doesn't care what it cost you; they care what it's worth to them, and that number is usually far higher.
Cost-plus pricing feels safe and fair, but it anchors your price to the wrong thing entirely: your expenses. Two customers can get wildly different value from the identical product, yet cost-plus charges them both the same low number — and hands the difference away for free.
Cost sets the floor; value to a specific buyer sets the ceiling — and your profit peak sits well above where most owners dare to price. There are four ways to support a price, climbing from replacement cost (what to rebuild it) up through market comparison and future income to value comparison (what it's uniquely worth to this buyer). Anchor near the value ceiling, not the cost floor.
- Replacement cost — 'what would it cost to build or buy again?' This is the floor.
- Market comparison — 'what are similar things selling for?' A useful sanity check.
- Future income — 'how much money will this bring the buyer over time?' Price a slice of it.
- Value comparison — 'who is this uniquely valuable to, and how much?' This is the ceiling.
A service costs you 200 to deliver. Cost-plus says charge 300. But it saves the client 3,000 a year — value comparison supports 900 or more. Same work, triple the price, because you anchored on their gain, not your cost.
The trap at both extremes: price at your cost and you leave most of the value on the table; price at the absolute maximum one desperate buyer would pay and you scare off everyone else. The profit peak is an interior point — higher than cost-plus, but not the ceiling — and most owners never even test upward to find it.
Cost-plus asks 'what do I need to make?' Value pricing asks 'what is this worth to the person in front of me?' The first ties your ceiling to your supplier; the second ties it to your customer's gain — and their gain is almost always the bigger number.
For your main offer, write down the concrete value the customer gets — money saved, money earned, pain removed. Then set a price anchored to that number, not your cost, and test it on your next three prospects.
Price against value, not cost. Your cost is only the floor; what the outcome is worth to a specific buyer is the ceiling — and the profit peak sits higher than almost every owner dares to price.
Turn Interest Into Paid