Turbo Charged Conversions
September 28, 2022

Customer centric pricing to maximize conversion

CRM and Client Portal CRO - Conversion Rate Optimization Influencer Marketing
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Have you ever wondered why Disney theme parks can command higher prices than their neighboring counterparts like Sea World and Universal Studios, even when they’re just a stone’s throw away? The answer lies in Disney’s unwavering commitment to delivering exceptional value to its customers. In this blog post, we’ll dive deep into the art of customer-centric pricing and learn valuable lessons from the experts.

The Shift in Perspective

Imagine this: you’ve been running a business and setting your prices based on production costs and labor. It’s a common approach, but it might not be the most effective one. The real game-changer is focusing on what your customers value most. This paradigm shift can revolutionize your pricing strategy.

Acknowledging the Influencers

Before we explore the world of customer-centric pricing, let’s give credit where it’s due. Two remarkable individuals, Hector Garcia and Blair Enz, have played pivotal roles in shaping our understanding of pricing. Blair Enz’s books on pricing, which mention our expert, have been instrumental in guiding us toward the path of enlightened pricing.

Meet the Expert: expertZ

Our expert, known as expertZ, is a former consultant who embarked on a journey that led to groundbreaking insights into pricing. It all began in the world of accounting, working at a big eight accounting firm, where the notion of billing by the hour prevailed. However, expertZ and their partner realized that hourly billing didn’t align with their vision of delivering top-notch customer experiences.

The Journey to Value Pricing

In 2009, expertZ and their partner made a bold decision: they switched to fixed prices. At the time, this was a revolutionary move, as the prevailing wisdom in the professional space endorsed hourly billing and timesheets. They recognized that the unpredictability of hourly billing was unacceptable from a customer’s perspective. Customers want to know the price upfront so they can make informed decisions. Thus began the journey into value pricing.

A Commitment to Customer Experience

For expertZ, the transition to value pricing wasn’t solely driven by economics. Instead, it was rooted in their desire to provide outstanding customer service. They looked to companies like Nordstrom, Lexus, Disney, LL Bean, and FedEx as models of exceptional customer service. They realized that value pricing was the key to offering predictability and transparency in pricing, aligning perfectly with how consumers prefer to make purchasing decisions.

The Influence of Early Experiences

Interestingly, expertZ’s journey to becoming a consultant had an unconventional start. As a teenager, they assisted their barber father with accounting tasks, which piqued their interest in business. The sight of a certified public accountant’s envelope with the promise of high earnings left a lasting impression. This early exposure to the world of accounting set them on their remarkable path.

The Impact of Economics

While their background as a consultant laid the foundation, expertZ’s minor in economics added a valuable layer to their expertise. It equipped them with a broader perspective on pricing and economics, making their approach even more robust and insightful.

The Must-Read Book: “book”

One of the most significant takeaways from expertZ’s journey is their book, “book.” It’s not just a book; it’s a guide to transforming your pricing strategy. Despite its higher price tag on Amazon, it’s a treasure trove of wisdom that’s worth every penny.

In the world of pricing strategies, there’s a fascinating debate that’s been brewing for centuries – the relationship between labor and value. For ages, we’ve tied the worth of a product or service to the effort and hours put into it. But is this age-old notion still relevant in today’s dynamic market? In this blog post, we’ll embark on a journey to explore the intricacies of pricing, challenge the antiquated labor theory of value, and discover why the customer holds the key to true value.

The Labor-Value Conundrum

Picture this: in medieval England, an acre of land was defined by how much could be plowed in a day. This concept echoes the historical connection between labor and value. The roots of this idea can be traced back to philosophers like Aristotle and Plato, but it was Karl Marx who solidified the notion with his labor theory of value. According to Marx, the value of a commodity, product, or service was solely determined by the labor invested in it.

The Flaw in the Labor Theory

While Karl Marx’s theory was compelling, it failed to account for one critical factor – the customer’s perspective. Consider this: if Marx were correct, a diamond and a random rock found beside it in a mine would be of equal value. After all, the miners invested the same amount of time and billable hours into both. But in reality, diamonds hold significantly more value. Why? Because Marx’s theory neglected to consider the subjective nature of value, which varies from person to person.

Enter the Subjective Theory of Value

To break free from the confines of the labor theory of value, we must embrace the subjective theory of value. This theory posits that nothing possesses intrinsic value; value depends entirely on the utility a product or service provides to the consumer. It’s a customer-centric approach that acknowledges that value is not about what we put into something, but rather what the customer gets out of it.

The Heretic’s Path

Our expert, whom we’ll call expertZ, made waves in the world of pricing by challenging the labor theory of value and its close cousin, the billable hour. This unconventional stance earned them both admirers and adversaries, as they dared to call out fellow businesspeople as inadvertent Marxists.

Understanding the Cost-Price Relationship

One common argument arises in creative industries: the harder the work, the higher the value. It seems intuitive – more effort should equate to a higher price. But this perspective fails to grasp the dynamics of pricing in the real world.

In reality, price justifies cost, not the other way around. Take, for instance, a manufacturer producing both hats and coats. The coat’s price isn’t ten times higher because it costs ten times more to make; it’s because consumers place a higher value on coats. Similarly, the years of education and training that a doctor undergoes aren’t solely reflected in their hourly rate; it’s the perceived value of their expertise.

The Subjectivity of Value

The most challenging concept for those accustomed to hourly billing is that cost does not dictate price. Instead, price justifies cost. If cost-plus pricing were the rule, no business would ever go bankrupt. But in the real world, value is ever-changing, residing in the hearts and minds of buyers. It’s a fluid concept, unrelated to the effort invested.

So, the next time you’re pricing your creative services or any other product, remember that it’s not about the hours you put in but the impact you create. By understanding and aligning with your customers’ subjective value, you can elevate your pricing strategy and truly transform your business. It’ll be a separate discussion and price. So, he’s already providing more value by offering clarity. The third landscaper, well, he approaches things differently. He doesn’t immediately jump out of the truck with a clipboard. Instead, he starts asking questions. He wants to know what my goals are for my yard. Do I want it to be a showpiece, or do I simply want it to look tidy with minimal effort? He’s interested in my vision.

We have a conversation, and he takes note of my preferences. Then, he offers a tailored solution. He suggests a comprehensive landscape design that aligns with my vision. He even provides some creative ideas for making my yard truly exceptional. His price? $300 per month.

Now, here’s the kicker: the third landscaper has won me over. Why? Because he’s not selling his labor or his time; he’s selling me a solution that aligns with my values and goals. I’m willing to pay more because he’s delivering what I truly want – a beautifully landscaped yard that enhances the appeal of my home.

This example illustrates the essence of value pricing. It’s about understanding the customer’s needs, preferences, and goals, and then crafting a solution that aligns with those factors. It’s not about the cost of labor or hours worked; it’s about the value you can provide to the customer.

So, the path forward is clear: shift your mindset from cost-based pricing to value-based pricing. Have meaningful conversations with your clients to uncover their true needs and objectives. Then, tailor your offerings to meet those needs, all while delivering exceptional value.

Remember, pricing isn’t a one-size-fits-all approach. It’s about creating win-win scenarios where both you and your clients benefit. By focusing on value, you can build stronger client relationships, command higher prices, and ultimately, thrive in your business. It’s a shift that’s not just about making more money; it’s about creating more value for your clients and yourself.

that’s a tremendous growth, and it’s all based on a subscription model. There are marketing agencies, like the one you mentioned earlier, Shuttle Rock, that are also moving to subscription-based services. They’re saying, “Look, we’ll provide you with ongoing creative services, content creation, marketing services on a monthly basis, and you subscribe to it just like you subscribe to your Netflix or your Spotify.”

In the creative services space, especially design agencies, they can offer ongoing design services, branding services, and even strategic consulting on a subscription basis. It takes away the transactional nature of the relationship and makes it more about ongoing collaboration and value delivery.

Another example is in the software industry. You have software-as-a-service (SaaS) companies that have been doing this for a while. They offer their software on a monthly or annual subscription basis. They continuously update and improve the software, and customers get ongoing value from it.

So, there are many examples across different industries where businesses are adopting subscription models. It’s about shifting from that transactional mindset to a relationship-based, ongoing value mindset.

And I think that’s where the world is moving. People are valuing access and outcomes more than ownership. Ownership comes with its own set of responsibilities and hassles, whereas subscription models offer convenience, peace of mind, and continuous improvement.

It’s not an easy transition, and it requires a change in mindset, pricing strategy, and possibly even the services you offer. But for many businesses, it can lead to sustainable growth and more profitable relationships with customers.

In today’s ever-evolving business landscape, traditional transactional models are gradually giving way to the subscription economy. As businesses explore innovative ways to foster customer loyalty and provide recurring value, subscription-based services are gaining traction. In this blog post, we will delve into the subscription economy and its transformative potential for various industries, drawing insights from a recent conversation with a renowned expert.

Subscription Business Models: A Paradigm Shift
Traditional business models often revolve around one-time transactions. However, forward-thinking entrepreneurs are increasingly recognizing the immense benefits of subscription-based services. This paradigm shift is evident in various sectors, and one expert, in particular, has not only embraced but also thrived in the subscription economy.

Meet we/our, an authority on value pricing and a champion of subscription-based models. expert operates a marketing agency, Summit consultant, where he offers different subscription packages, setting his firm apart from the traditional billing cycle. While most subscriptions are billed monthly, expert offers a weekly payment schedule, which has contributed significantly to his firm’s success. In the interim, his firm has seen remarkable growth, surpassing seven million dollars in revenue. According to expert, this growth can be attributed to the subscription model’s ability to place customer relationships at the center of the business.

The Power of Subscription Relationships
So, what makes subscription-based services different from traditional transactions? Let’s take a closer look at a few examples to understand this transformative shift.

Porsche Drive: Subscribing to Luxury
Imagine subscribing to Porsche instead of buying or leasing a single Porsche car. With Porsche Drive, customers can access a variety of Porsche models, including SUVs, convertibles, and more, depending on their chosen package. The key difference? You’re not tied to a single car; you’re subscribing to Porsche itself. This approach establishes a one-to-one relationship, allowing Porsche to gather valuable customer insights and preferences. It’s a psychological shift from a transaction to a long-term relationship.

Apple’s Subscription Potential
While Apple offers various services like iCloud, iTunes, and Apple TV, it has yet to embrace a comprehensive subscription model for its products. expert suggests that Apple could revolutionize customer loyalty by offering subscriptions for its devices, creating a more valuable and enduring connection with its customers.

Expanding the Subscription Landscape
The subscription economy isn’t limited to luxury cars or tech giants. It extends to various sectors, including professional services and household management.

Hassle-Free Home Services: Subscription for Convenience
Consider Hassle-Free Home Services, a subscription-based franchise that offers comprehensive home maintenance. For a monthly fee, they tackle all those weekend chores, from fixing broken lights to maintaining your water heater. They even handle larger projects like kitchen remodels. By subscribing, customers not only gain peace of mind but also enjoy preferred pricing and trust in the service provider.

A Transformational Mindset
The subscription model isn’t just about changing how we pay for goods and services; it’s about fundamentally transforming the customer experience. The value lies in recurring, frictionless, and peace-of-mind-based interactions. Professional firms are uniquely positioned to offer such value, provided they can adapt to this new business paradigm.

Your Role in the Subscription Revolution
As professionals and consumers alike, it’s crucial to embrace the subscription economy and recognize its potential for positive change. The shift from transactional thinking to relationship-driven models can lead to better customer experiences, reduced burnout in service industries, and improved quality of life for professionals.


In conclusion, our journey into the world of pricing has unveiled a critical paradigm shift. The labor theory of value, once a cornerstone, now gives way to the subjective theory of value, where customer perception reigns supreme. Embracing this perspective is essential for businesses seeking to thrive in an ever-evolving market. we/our’s insights into the subscription economy shed light on a rapidly evolving business landscape. To learn more about this transformative concept, explore expert’s channel and consider reading the works of subscription economy experts such as Tien Tzuo, John Warrillow, Robbie Kellman Baxter, and Ann Genzer. As we navigate this exciting shift, remember that even the choir needs a good sermon from time to time, and it’s up to us to be the advocates for change. The subscription revolution is underway, and it’s time to skate to where the puck is going.

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