Pricing Isn't About Price
Entrepreneur Office Hours - Issue #329
Inside the Office
A CEO I work with came into a session visibly frustrated. He had a strong product, happy customers, and growing interest in what he was building. And yet, sales were slow, deals dragged, and every conversation seemed to end with some version of, “We need to think about it.”
They opened the meeting with what they thought was the problem: “We need help with pricing.”
That’s usually the tell.
So instead of asking what they charged, I asked a different question: “How do your customers decide if you’re worth it?”
They talked about features and competitors. They talked about being “fair,” and about not wanting to scare people away. All reasonable instincts, but all completely backwards.
Here’s the lesson I’ve learned as both a CEO and a professor: pricing is not about what you charge… it’s about how customers understand value. When pricing feels hard, it’s almost always because the value story isn’t clear enough.
We walked through the conversations they had in their last five deals. Where did customers lean in? Where did they hesitate? What problem were they actually trying to solve? It became clear very quickly that the product was doing something far more valuable than the CEO realized. It wasn’t saving time. It was reducing risk. It wasn’t adding convenience. It was preventing costly mistakes.
But none of that showed up in how they talked about price.
Instead, they anchored pricing to inputs, focusing on hours, features, and comparisons. Customers, meanwhile, were making decisions based on outcomes like peace of mind, avoided pain, confidence. Those two frames never meet.
We reframed the conversation around a simple idea: customers don’t buy your product; they buy the moment after your product works.
Once we named that moment, everything changed.
Pricing stopped being a number and became a signal. It was a signal of seriousness, a signal of confidence, and a signal of understanding the customer’s world. We repositioned the offer around the cost of not solving the problem, and, suddenly, the price wasn’t high. It was actually small relative to the downside customers were already living with.
At first, the CEO was uncomfortable. Not that I was surprised, because most founders are. Underpricing feels humble, whereas raising prices feels risky. But when you price too low, customers trust you less, not more. They assume you don’t fully understand the value you create, or worse, that you don’t believe it yourself.
This is proved itself out when, a few weeks later, deals were closing faster. And it wasn’t because they changed their product. It was because they changed their story. Customers could now see themselves in the value, not the feature list. And the CEO stopped apologizing for the price.
The lesson I left them with (and I’m hoping you’ll take away, too), is that pricing is strategy, pricing is positioning, and pricing is leadership. It tells customers how to evaluate you.
If pricing feels hard, don’t start with the number. Start with the value. And remember, if you can’t articulate the value clearly, the market will do it for you, and it’ll usually do it at a discount.
-Shep
Worth Your Time
I was at a talk last week at Raleigh Durham Startup Week and had my memory refreshed about an actionable word-of-mouth marketing framework that I hadn’t thought about in a few years — STEPPS (Social Currency, Triggers, Emotion, Public, Practical Value, and Stories).
The speaker, Jonah Berger, asked a simple question: why do some things spread and others don’t? He wasn’t focused on social media algorithms, but rather on actual people telling other people. Cheaper AND more powerful.
If you’re trying to get a message out — about a product, a cause, an idea — answering this question is imperative. In Contagious, Berger answers this question, which is rooted in world-class research. I highly encourage you to read the book (he’s a great storyteller, which is no surprise), but you can also take the shortcut and learn about the STEPPS framework on his resources page.
Contagious by Jonah Berger.
Tools We’re Tinkering With
Editor’s note: All resources suggested in this section are based on our opinions. These aren’t affiliate promotions and we don’t generate commissions.
Codex is becoming an operating layer for my startup. Codex is OpenAI’s AI coding agent. Most people use it for the obvious software work: writing code, reviewing pull requests, debugging, and helping ship product faster. I use it for that too, but the more interesting shift has been using Codex to connect what is happening in the codebase to the broader work of building a company.
Each week, I have agents review our code and summarize what changed: what shipped, what slowed down, what questions are still open, and where the roadmap is moving. Because Codex can also connect to other tools and sources, that work does not have to stay trapped in one place. It can pull together and update product docs, customer feedback, sales notes, and planning materials without forcing everyone into the same workflow. Better decisions come from better context, and Codex helps turn scattered activity into actual forward motion.