I’m selling hockey AI vision software for $20K up front plus $3K/month retainer ($56K first year) to solve a problem the client spends $150K/year on. Is my pricing too high given the risk and ROI?
Your price is about 56% of the claimed value, which is too high; aim for roughly 15% of the value you deliver (e.g., $15K for a $100K problem) to give a 7x ROI, making the offer far easier to accept. Lowering the price improves perceived ROI and reduces client risk.
A tiered (“ladder”) pricing approach can work, but the real key is confidence and positioning. Your value comes from the perception of high‑touch, white‑glove service combined with templates that do 80% of the work, letting you leverage effort like a mortgage. To charge $3,000/month, first uncover the client’s problem and quantify its cost (e.g., $10,000/month), then present your $3,000 solution as a clear ROI. Use consultative sales to get them to agree on the problem’s worth, then offer your service as the logical fix.
Separate variable (scaling) cost that rises with what the client pays you from fixed cost (onboarding, check-ins, platform risk) that's the same per client. With 20 clients at $1,250 each you'd gross $25k but also incur 20× the fixed cost—feasible if you account for both. Price via value-based: ask the client what they currently spend on the problem and what they'd gain with your solution, total that value, then charge roughly 30% of it (e.g., if they spend $5k/mo on a setter and you add another $5k, total $10k → $3k/mo).
To justify a $10,000 monthly retainer, you need to make the client’s business generate between $50,000 and $100,000 per month in return. If you’re paid $10,000 to produce $50,000–$100,000, that’s a 500% return on investment—a rare and attractive opportunity. The key to charging high fees is delivering a high ROI multiple; if you can achieve that, you can charge whatever makes sense. Many businesses accept a 2x ROI, while a 5–10x ROI is a solid middle ground, and exceeding 10x to 20–30x makes clients eager to work with you. To achieve this, focus on industries where you can generate high returns, either by leveraging your own strengths or by selecting niches that naturally deliver high ROI, such as HVAC, plumbing, air conditioning, or insurance—industries where money flows freely and people budget for services as a percentage of earnings. By targeting such pre‑committed spending areas and delivering strong ROI, clients will be willing to pay whatever you ask.
I’ve covered this before, so check the previous video. The key isn’t just the objective value of the system; it’s how much you can sell it for, which depends on your sales skills. You need to press a pain point and capture that pain point clearly in the solution you propose. That’s what drives price justification and client acquisition.