Hey {{ first_name | readers }},
Thanks to everyone who voted! The top-voted topic was pricing, but it was a close call. This worked well, so Iâll include polls periodically :)
Today, in 10 minutes or less, youâll learn:
đ°6 pricing strategies I learned on my path to earning 2x-5x my hourly rate
đ How to pick the right pricing tier before you design your service
𧎠Two proven pricing formulas (plus when to use each one)
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đ° How I'd choose the right pricing model (starting over)
In the last 2 years, Iâve earned between 2x-5x my hourly rate through consulting work.
But I made lots of mistakes along the way - especially when just starting out!
From undercharging and leaving thousands of dollars on the table to struggling with creating a right-sized package.
The biggest mistake? I think itâs starting with the service I wanted to deliver, then hunted for clients willing to pay for it.
Today, Iâve flipped my entire approach.
Instead of starting with my service, I start with the PRICE:
The category I want to play in
The pricing tier (high, mid, low-end) of the category to start with
Expected value of competitive offers in this pricing tier
THEN I work backwards to my value prop and offer design.
And thatâs just the tip of the iceberg.
In this newsletter, I'll walk you through the 6 pricing strategies I'd use if I were starting my portfolio career over today.
Letâs dive in:
1/ Pick your pricing tier đ°
Choose your category and pricing tier first.
Take menâs haircuts as an example.
Hereâs the pricing tiers you might find:
Tier | Price Range (USD) | Experience |
|---|---|---|
Low | $10â$25 | Quick 10â15 min cut, limited styling, minimal frills. |
Medium | $30â$70 | Appointment-only, skilled barbers, often includes extras like hot towel, wash, and beard trim. |
High | $70â$300+ | Premium grooming experience including personalized styling, massage, alcoholic beverage, and luxury comforts. |
If I were starting a barbershop, the first thing Iâd do is pick a tier.
The reality is you get very different clients and expectations for each tier, which necessitate different solutions.
If I want to command a high-tier price, then I better be ready to offer personalized styling and luxury comforts because thatâs the expectation that clients have at this tier.
Your pricing tier influences things like client definition, value, and solution complexity.
2/ Work backwards to your offer đ
Now design your service to exceed the expectations of that pricing tier.
Ask yourself:
What is the âtable stakesâ experience for this pricing tier?
How can I deliver 10x ROI on this pricing tier?
When working with a Series B fintech startup on enterprise activation, I identified significant bottlenecks in their client onboarding flow. Making improvements could dramatically accelerate time-to-value and reduce enterprise churnâdelivering ROI that made my 5-figure engagement a no-brainer.
3/ Define building blocks of your offer packaging đ§ą
Now I would define the 3 offer components to fit the pricing tier:
Value: the specific problem youâre solving for the client
Method: How youâre delivering that value (e.g. workshop, project-based, fractional, advising, etc.)
Interface: How clients experience your service (online/remote, in-person, etc.)
IMO be specific and firm with the value, but flexible on the method and interface.
I had a call with a startup founder, who wasnât sure if he needed a fractional CPO, advisor, consultant, etc. He just knew he didnât want to make mistakes shipping the wrong thing or being a bottleneck for product development. We started with these problems and then guided him to the right method (it was advisory in this case).
4/ Choose your pricing formula â
Here are two approaches I would use, depending on the situation:
