Wrapping up the Price Triangulation Mental Model…

So, we now have three potential prices for your consulting service, from three different angles:

• ​A revenue-based price​
• ​A value-based price​
• ​A market-based price​

Which way to go?

First off, resist the temptation to take the average of the three.

This would be like blending a scoop of Neapolitan ice cream into a milkshake — you lose the unique benefit of each flavor and are left with a sticky situation with no rational explanation. 🍨

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Rather, consider the prices in the following ‘order of operations’:

1. Follow the light of the value-based price

Not only will the value price likely be the most lucrative one, it’s also the most client-oriented.

Why else is a client hiring you except to unlock additional value? So why not set the price in those terms?

When you do, a value-based price allows you to easily frame your services as an investment with a 10x ROI, rather than just a steep hit to their bottom line.

Just be ready to back up that ROI :)

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2. Use the revenue-based price as your floor

You’ve gone through the exercise of articulating your business goals and your capacity.

This now provides you with the minimum price you should accept if you stray from your value price.

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3. Treat the market-based price as intel — nothing more

You operate in a marketplace, and your prospects have options besides you. So, be aware of what you might be up against in their eyes.

But be careful not to over-rotate on market prices. It’s a surefire way to commoditize yourself.

Instead, use them as inspiration to articulate the unique value your service provides over and above what the ‘market’ might suggest.

If directly questioned about your price vs. another option, you’ll feel confident to speak to your differentiated value.

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So, since I’m sure you’re asking, what should Marcos do?

Applying the order of operations, Marcos should set his price at $50,000 and focus on how he will communicate the $500k he unlocks through his intensive.

If he's successful in doing so, he'll far exceed his original business goals.

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Thoughts or questions on this mental model? Drop me a line! The replies this week have been fantastic. 👌

Thanks for following along...

💡

-Wes