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Forget About What a Price Should Be

“Should” is a verb used to say or ask what is the correct thing to do.

This is dangerous – thinking about the value of service as if it was a math problem, with only a single correct answer. Because even when all the factors of production have been calculated, there are also authority, experience, scarcity, urgency, image, convenience, original thought, and so on could that often contribute to the value, and therefore could, justifiably, be priced in._

The key would here is “could”, a verb used to talk about what someone or something was able or allowed to do. Inherently, the “could” framework is more aligned with the reality of value being an inherently subjective property, with the same price being a _bargain for one client and a ripoff to another.

In contrast, all the pricing formulas I was taught pre-suppose perfect knowledge of both parties, in a closed and controlled system, with no inflation, no immoral urges, or any irrational behavior. With all due respect, for me that’s about as useful as new shoes that would make it possible to walk on water, but only if water was made of stone in that reality. When designing a price, I’m thinking about all of the value-adding elements that could be priced in without pricing out the target markets.

Let’s forget about finding the (one) “correct” price. Let’s start experimenting in order to find multiple prices that “could” work.

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