Pricing: Calculate What to Charge for Profit

Right now, a tiny tweak to your prices could boost profit more than a big jump in sales. A designer charges two hundred dollars, another charges five hundred for the same work—both fully booked. In this episode, we’ll unpack why, and how to choose your number on purpose, not by guesswork.

That profit boost from tiny price shifts isn’t theory—there’s hard data behind it. McKinsey found that, on average, a 1% increase in price can raise operating profit by 6–11%. Yet most businesses still default to “cost plus a bit” and leave money on the table. Harvard Business Review reports only about 15% of companies consistently use value-based pricing, even though customers routinely pay wildly different amounts for similar outcomes: a $39 course vs. a $390 one, a $15 haircut vs. a $75 cut, a $9 app vs. a $99 subscription.

In this episode, we’ll move from “What can I get away with?” to “What’s the right number for my offer?” You’ll learn how to calculate a fully loaded unit cost, translate customer-perceived value into a price range, and choose a number that holds up in your market—then test it without gambling your entire income on a hunch.