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.
Yeah, this is bang on — this is exactly what you want to do. You basically increase your prices until you get so much resistance that it doesn't make sense to increase them anymore. Here's a concept I think is really important: the optimal conversion rate is not 100%. If you put an offer in front of 100 people and all 100 say yes, odds are you could be making way more money by taking a few hits on the front end — because how much you actually make is conversion rate times price. If your fee is $1/month and 100% convert, you make $100 servicing 100 clients. If your fee is $25,000 and only 1 in 100 converts, you make $25,000 for 1/100th the work — 250x the money for 1/100th the work. This is an optimization problem: as price rises from low to high, conversion rate falls, but not proportionally at first — there's a hypothetical maximum where price times conversion rate is far higher than at a low price, even though conversion rate has dropped. So keep pushing your price up as long as your services stay solid; you'll make more money per unit of work. Alex Hormozi's rule of thumb is that the ideal conversion rate on a high-ticket service (and a $3K/month retainer with a ~5-month average return, i.e. $15K, counts as high-ticket) is around 30-40%. So if your current conversion rate is more like 50-60%, you'd actually make more money pushing pricing up until it drops to that 30-40% range — supply and demand: as price goes up, the number of people willing to say yes goes down.