What Coffee Can Teach You About How to Price Your Products & Services

Coffee can cost you 69 cents, $1.29, $3.25, or even $6.99…

…and I’m just talking a simple cup of joe, not a latte or cappuccino. 

The same is true of life coaching, web design, weight loss programs, yoga classes, virtual assistance, or any other New Economy service or offer.

Price is relative. Price tells a story. And pricing is a decision to be made, not a hole to fall into.

Coffee can teach us a lot about pricing

How much should a cup of coffee cost? And what does that have to do with how much you should sell your product, app, program, or service for?

The first answer is, it depends. The second answer is, everything.

The price of a cup of coffee is influenced by a lot of factors. And one of the factors that influence it least is the material cost of the beans.

Even expensive coffee beans tend to be relatively “cheap” (with a few notable exceptions).

The factor that influences it most is perhaps the different markets it’s sold in. You can get coffee almost anywhere, and where you get it influences how much you expect to pay.

Grab a 64oz Big Gulp of coffee at a gas station and you might pay 69 cents.

Pick up a 24oz coffee at a fast food chain and you might pay 99 cents.

Sip on a 16oz coffee from a specialty chain and that’ll set you back a little over $2.

Or, sidle up to the brew bar at high-end coffee establishments and that cup of coffee might set you back $5-7 (yes, I’m still talking about brewed coffee, not espresso).

While there is certainly a difference in the cost of the materials, overhead, and labor at these establishments, the price of a cup of coffee is influenced as much by the conversation you share with your barista, the environment of the shop, and the people you expect to meet there.

The same dynamic is at play with digital products and most services. While there are hard costs that influence price, most of the price is subjective and based on many factors that have nothing to do with materials or overhead.

Meaning influences price to a huge degree

The price of coffee is also largely dictated by what the product means to its customers.

Gas station coffee is a necessary evil, the solution to the problem of working too many hours, too early in the morning. Fast food coffee is a convenience, a simple pick-me-up in the middle of a hectic day.

Specialty chain coffee is a predictable luxury. Brew bar coffee is an experience all its own, a ritual, a little slice of heaven for the connoisseur.

If the local specialty shop started charging 69 cents for a cup of coffee, it would be jarring to your consumer mind.

You’d ask, “Why?” and you’d expect an answer about a promotion. If they just exclaimed, “Well, that’s what it costs,” you’d start to wonder, question its quality, wonder about the people running the place.\

If you price your products or services discordantly from what your customers expect to pay, you’ll leave them wondering the same things.

Whether too low or too high, the price of your product is suddenly something that makes people uncomfortable. And uncomfortable people don’t buy.

If your product or service promises a big life change or meaningful transformation, the price should be fit into that context. 

To make sure you’re putting your customers at ease with both the experience of your product or service and the price you’re asking them to pay for it, consider these questions:

  • What do you want your product or service to mean to your customers?
  • How do you want them to experience your product?
  • What does your customer expect your product to mean to them?
  • How does the set of features you’ve arranged for her add up in her mind?
  • What other products, services, or solutions might he be relating to your product?

Pricing is largely a chicken & the egg scenario

And too often, business owners play chicken

You don’t have to price your products like a gas station prices coffee. You can choose to have a more refined aesthetic, offer a more distinct point of view, cultivate a more demanding clientele, create more favorable positioning–and charge more.

It’s your choice

Don’t believe that these factors are out of your control. If there is any part of your business that you believe is negatively impacting your ability to set the price you want, take control and change it.

Adjust your brand or positioning, change marketplaces, rework your network, invest in design. Create an experience that really means something to your customers and results in a sustainable, profitable price for your product.

Make your customers comfortable with both the value your business is creating and the price you ask your customers to pay. And then have a cup of coffee.

Stop Trying to Charge What You’re Worth

I’ve long been a proponent of charging more, earning more, and feeling good about it. I’ve asked countless entrepreneurs to consider the value of their skills in a New Economy market where those skills are highly prized.

But there’s one thing that nags me about where this conversation inevitably goes.

When service providers, makers, and microbusiness owners of all ilk become empowered to consider pricing on a new level, they say, “I’m going to charge what I’m worth.”

There are two serious problems with this mantra:

1) You are priceless. Your work is not.

There’s really no way to quantify what “you’re worth” because you can’t measure the value of your precious life. However, skills, products, and services are quantifiable. There’s a going rate. And there is also the ability to raise or lower the going rate depending on how you position those skills, products, or services.

2) You’ve forgotten the customer.

There is no value without the customer. How much is doctor worth without patients? How much is a house worth if no one will buy it? How much is a company worth if the investors all bail? What you make or offer has no value until a customer is willing to purchase it.

Dave Gray states it plainly in The Connected Company: “A company can’t create value on its own: value is only created through exchange. The customer must participate in defining and determining that value.”

So how can you address this in practical terms?

Understand the whole market.

There’s no one set price for a cup of coffee. Go to a gas station and pay 69 cents. Go to a fast food joint and pay a buck. Go to Starbucks and pay $2. Go to Blue Bottle in San Francisco and pay $7.

Your market is likely the same. You know you’re not at the bottom of the barrel and you have no interest in being there. But have you explored the rest of the market? Do you know what the top-of-the-line looks like and how much it costs? Once you do, back track and complete your understanding of the whole market.

Determine what influences price.

Price goes well beyond materials, overhead, and labor. It goes well beyond experience and skills. Those are just factors that contribute to understanding a sustainable price from the business’s point-of-view. But many other factors influence price from a customers’ point-of-view.

What the product means to them, what results the service promises, and how your customers perceive your business in relation to the rest of your industry all contribute to what you can (and should) charge. The style of your website, the way your images are merchandised, the testimonials you provide (and the way they’re written), and your sales process give your customers a distinct impression of what your product or service is worth.

Adjust as necessary to make the price you want to charge match what your customers want to pay.

There may be many factors currently influencing the price you can charge that have consequences you don’t like. It might be hard–even unpleasant or expensive–to change them. It might involve better packaging, a shinier website, or more training. But it could also be as “simple” as introducing your work to a new group of customers or changing the way you talk about what you do.

Take full inventory of the factors currently influencing your price, both from your business’s perspective and from your customers’ perspective. Determine which factors you can change to create a better result for your business. Create an action plan to do just that.

And stop telling people you’re going to charge what you’re worth… Click to tweet.

Sell the End Result, Not the Service (or Product, or Program)

People aren’t looking for your service (or your product, or your program). They’re looking for results.

Your customers want to change the way they feel. They want to adjust the way they act. They have goals, they have desires, they have dreams.

All too often, businesses position their offers around the “what” of what they’re offering instead of the “why” people would actually go looking for it in the first place. Further compounding this problem, is that business models are built around “whats” instead of “whys.”

Instead of considering the best ways to achieve the desired end result for you and your customer, many business owners build models that are based on how a particular service or product has always been delivered. There’s a status quo web design model, a status quo life coach model, a status quo jewelry model.

When was the last time status quo got you the results you wanted?

You can build a business model that is focused on results, different from the rest of the marketplace, and more effective for your customers. But to do that, you need to start by making sure your core product or service is positioned function-first.

Here are 3 easy ways to reposition your offers around why your customers are actually looking to buy in the first place.

1) Lead with value, not the name of your product or service.

Your product isn’t the selling point, so why make it your headline?

If your service helps people feel better about their bodies, lead with that. If your product helps make a brand more memorable, put that front & center. If your program, helps people feel more confident about the business decisions they make and, consequently make more money, make that the star.

2) Make good use of “before & after.”

Just because you’re not Extreme Makeover doesn’t mean your product can’t benefit from some before & after swagger.

It might be as simple as listing a feature that implies the “before,” as this Bang Buster headband from Lululemon does. Or it might involve turning your customers’ before into a bullet point list that exudes empathy and an equally empathetic list of bullets that describe the “after” your customers have in mind.

3) Use visuals that allow your customers to see themselves getting the results they want.

Great visual merchandising helps customers see themselves actually owning, using, and loving a product. That’s why you prefer flipping through an Ikea catalog to browsing Amazon. While this might be standard practice for physical products, it’s also extremely useful for services and programs.

Maybe you use beautiful photos of happy mamas. Or images of curvy bodies successfully practicing yoga.

Instead of just focusing on you, let your customers see themselves achieving the results they want.

Side note: Stocksy has become my go-to source of non-stocky stock images.

I mostly pointed to sales page examples in this post (click the links above to see the examples) but positioning must be woven through all parts of your business–from the Most Valued Customer you seek to engage to your brand identity to your regular email communication. Dive deeper into the businesses I highlighted here and you’ll see a results-centered culture at the heart of everything they do.

Remember, your product is important to you but it’s results your customers are after. Click to tweet. Make how life will be different–whether in big ways or small–the focus of how your engage your customers and you’re sure to get bigger, better results for yourself.


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— Laura Whitman, co-founder, Red Balloon Relations

Playing a Different Kind of Money Game

I get asked to write about money a lot. I’ve written plenty of posts, guest posts, and a whole ebook. And when I sat down (multiple times) to write a new post about money for the Declaration of You blog tour, I was stumped.

I had one of those “What more can I say about this that I haven’t already said?” moments. Then I asked around, talked to Brigitte, and decided to write what’s been on my heart & mind for the last year.

When you’re known as the girl to go to for a money/earning/pricing smack-down, you have a reputation to take care of. And what is that reputation if it’s not about how much you earn? I learned that my money wake-up was just the beginning of an evolution of understanding around money and earning that has led me to build my business differently over the last 12 months.

After I got over my personal hang ups and misconceptions about my earning power, money for me was like a game. What product can I create, what conversion rate can I adjust, what marketing campaign can I invent that will make more, more, more? It wasn’t that I was greedy but that I was having fun.

I’m playing a different game now. I know how I could make a lot more money. I have the business model constructed. I largely have the platform and network in place.

But I choose to do something a little different.

The game I’ve been playing with money lately has only has two rules:

  1. Put as little time into the business as possible so that I can live a rich life outside the office.
  2. Do the work that will allow for the greatest returns in the future with as little hustle as possible.

I’ve concentrated the work that I do into short bursts of energy that have more impact on clients than I’ve ever had before. While I’m making about the same annually, I’m doing so with extraordinarily less effort.

But it’s not just about working less. It’s really about the set-up, the long game.

Just wait til you see what’s coming.

Because financial reward is one [of many] outward symbol of greater impact, choosing to dial back on earnings comes with mixed feelings and plenty of impostor complex questions. Can I be an effective business strategist if I’m not maxing out my earnings? Will I lose potential clients because I choose not to pursue the million-dollar launch strategy? What will happen to my reputation?

The truth is I am an effective strategist–many of my clients are generating much more revenue than I am. The truth is that any clients I lose weren’t the right clients for me. And the truth is that my reputation is stronger than ever–as far as I can tell!

Your net worth is not your self-worth. Your hourly rate isn’t your reputation. Your sales target isn’t your impact.

Right now, I choose to make decisions that bolster my self-worth, shore up my reputation, and maximize my impact–now and into the future. Those decisions result in leaving money on the table. But I believe that the decisions I’m making today will lead to greater return–both in profit & in impact–than trying to scrape up every last penny or find the gold at the end of the rainbow.

I also enjoy mixed metaphors.

There’s a time and a place to play the just-how-much-can-I-earn game. And I hope you play it, and play it hard. But I also hope that you take time to readjust every so often and look to the long game. What are you setting up today that will take care of you–and your customers–in the future?

Are you going after a bigger piece of the pie? Or are you baking a new pie that will make others lives meaningfully better?

Are you going after financial reward at the cost of relationships, peace of mind, or reputation? Or are you creating something that is in alignment with your values and preferred modus operandi?

Today, my declaration of money is that the choice to make less is often a choice about making more later, an investment in future impact.

What are you investing in? What game are you playing?

The Declaration of You, authored by my brilliant friends Michelle Ward & Jessica Swift, gives readers all the permission they crave to step passionately into their lives, discover how they and their gifts are unique, and uncover what they are meant to do! This post is part of The Declaration of You’s BlogLovin’ Tour, which I’m thrilled to participate in alongside over 200 other creative bloggers. Learn more — and join us! — by clicking here.

Define your bottom line.

My bottom line is impact.

I believe impact can and should be profitable.

I believe profit is abundance. It’s the absolutely necessary positive gain on the energy, effort, and execution your business invests in [value] creation.

I believe an important part of that positive gain is financial. But wealth is not one dimensional. I also measure profit in relational, emotional, and organizational wealth.

I believe business has an obligation, a duty, a responsibility to increase its bottom line and maximize it’s profit margin: increase its impact, find the path to leveraged abundance.

Dollars & cents really do matter. And there’s so much more, too.

What’s your business’s bottom line?

Dig it? Click here to tweet this post.

The Danger of Affordable: How to Reframe This Negative Script

While some businesses focus on catering to the luxury market, most businesses are looking to serve a broader market of incomes & lifestyles. Even when you’ve gotten crystal clear on who you’d most like to serve, that group can be diverse.

So it’s natural to want to offer a way to engage your work that’s “affordable.”

The thing about “affordable” is that it’s not actually related to price; it’s related to value.

Here’s what it takes for something to be affordable:

An affordable product must deliver considerably more value to the customer than the value she exchanges for it.

Of course, all of your products should fit that description. Michael Port, author of Book Yourself Solid Illustrated, uses a baseline of 20x–he prices his products in a way that he can guarantee a 2000% return on investment if implemented properly.

So the real danger in using the word “affordable”–even just in your own head–is that, I believe, it undermines your perception of the value you are already offering. Everything you create is affordable. Everything you offer delivers a significant return on investment in terms of money, convenience, fulfilled desires, time, etc…

That’s the very essence of affordability.

But that’s not what you mean when you make offering something “affordable,” is it?

So let’s stop using this word that doesn’t really mean what we think it means. Let’s remind ourselves that businesses are have a duty to create products that are affordable based on value and return on investment.

So what does your business need?

What your business needs is something accessible, something with a low barrier to entry, something that requires less trust on the part of your new customer. Those are the kind of products that help your potential customers turn into loyal customers, while creating a stream of revenue for your business at the same time.

Look more closely:


Often brands have their own language, their own energy. Does your business offer an initiation to this language? Do you offer a product that imbues that energy to new customers?

Doing business with a new brand can be intimidating to customers, especially when their hopes, dreams, or goals are on the line. When you offer an accessible product, you’re giving your prospects a way to ease into your business’s bigger offerings.

Low Barrier to Entry

Does your business offer a product that is easy to get? Something that’s on sale all the time? Something requires very little of your potential customer?

Products with a low barrier to entry allow new prospects to turn into new customers very quickly. They can often open the door to a more in depth sales conversation.

Lower Trust

You want to deliver big results for your customers. However, those big results often require a big leap of faith on behalf of your potential customers. Do you have a product that requires a little less trust? Promises an equally important but smaller outcome?

Products that produce concrete results and accomplish tasks that your customer are already seeking solutions for require much less trust than those that promise transformative change. Building trust in small steps prepares your customers to bigger steps with your business in the future.

Stop selling yourself short on the value of your products or services. Look for an opportunity to create a product that creates a path into your business that’s accessible, low barrier, and low trust.