"How do I charge more?"

"How do I charge more?"

A six-figure digital marketing agency owner asked me this yesterday.

I shared these two ideas with him:

1. Help your customers solve more expensive problems. The more value you create for your customer, the more you can charge because money follows value.

2. Reverse the risk for your customer. Instead of charging for services (the client takes the risk), charge for results (you take the risk). When your customer only pays for the desired result, you can charge more to give it to them.

Questions to ponder:

👉 What is the real-world value of the problem(s) we solve for our customers?

👉 Can we take on more risk for delivering more value to our customers in exchange for higher prices to deliver it?

Frequently Asked Questions

Why does solving more expensive problems allow for charging higher prices?

Because money follows value. The more value created for a customer, the more that value justifies a higher price, directly tying pricing power to the significance of the problem being solved.

What does "reversing the risk" for a customer actually mean?

Charging for results instead of services, meaning the provider takes on the risk rather than the client. When customers only pay for the outcome they actually want, that shift in risk justifies a higher price for delivering it.

Why would a customer be willing to pay more under a results-based, risk-reversed pricing model?

Because the risk of not getting the desired outcome shifts away from them. Removing that uncertainty from the client's side makes a higher price feel justified in exchange for that guarantee.

How can a business figure out if it's solving expensive enough problems to charge more?

By honestly assessing the real-world value of the problems currently being solved for customers, if the value created is significant, there's likely room to charge more in proportion to that value.

What's the practical question worth asking about taking on more risk for higher prices?

Whether the business is willing to shift toward charging for results instead of services, taking on more risk itself in exchange for the ability to charge higher prices for delivering the desired outcome.