If everything used “value based pricing” a bottle of water would be $100.

(What’s more valuable than a substance essential for life?)

I’m all for people earning more.

(And yes, some folks need to raise their prices)

But, without context, advice like “charge more!” and “use value-based pricing” isn’t helpful.

Most products and services should charge a reasonable multiple of the value they provide.

Example:
If my service brings you $100k of business, it’s reasonable for me to ask for 10%-30% of that.

Unfortunately, most transactions aren’t that cut-and-dry (or that simple).

When folks yell out “charge more!” on the internet, I want to know:

“Charge more” compared to what?

Is it:
- Charge more compared to other people in your industry?
- Charge more compared to what you charged last year?
- Charge more than other people in your state?

Also, when you say “charge more,” how much more are we talking about?

Is it “everyone should charge 2x more than they’re charging now?”

Given all the variables that go into pricing, why is the advice always charge *more*?

For example, does the “charge more” advice apply regardless of context?

If we’re in a recession should we charge more?

If the industry standard is to pay $1000, should we charge 2x more?

If you haven’t had a sale in 3 months, should you still charge more?

Certainly:

If you’re serving enterprise clients, you should charge more because you’re going to have to put up with a lot of bullshit.

If you’re charging $100 / hr, but everyone else in your industry is charging $200, you should charge more (especially if you’re as good).

But the answer can’t always be “charge more.”

There’s no nuance in that answer. We treat “charge more” like a pricing panacea.

Pricing a (given product) in a (given market) is more complex than that. https://justinjackson.ca/charge-more 

Also, remember what happens when you’re on the receiving end of someone raising their prices.

When companies like Netflix (b2c) or Intercom (b2b) raise their prices, you probably don’t like it.

Like @nathanbarry says: “Sometimes, it’s good to leave a surplus of value on the table.” https://nathanbarry.com/value/ 

Generally, your pricing should reflect:

- the value you give,
- the market segment you're targeting,
- the economy (weak/strong) you're in,
- the stage of your company,
- customer demand.

"Charge more" can be good advice.

But, depending on the context, so can "charge less."