The False Promise of a High Ticket

Spend five minutes frantically googling how to grow your sales, and you’ll see the same recycled advice: if you want to grow, just raise your rates.

It sounds good. It feels good. The math works out on paper. Like most quick fixes sold online, it makes you think the problem is solved with one quick decision.

The reality, especially for service-based businesses, is that raising rates without a strategy can be one of the fastest ways to slow yourself down. 

Pricing doesn't (or shouldn't) come from nothing. It's not a finger-in-the-wind exercise, but too often, I see small business owners pricing based on mood rather than math. 

Good pricing is informed by so many different variables, which can be grouped into four primary categories: 

• Cost. Your services cost something to deliver: office space, materials, internet, and the value of your time, to name a few. Your price needs to cover those costs (and more than cover them to generate a profit)
• Competitors. You aren't the only person in your industry. Your competitors have a pricing structure as well, and you need to be sure that you are not pricing yourself out of the contest by going too high or too low.
• Consumers. Consumers have their own preconceptions of what a haircut, landscaping, or a trip should cost. Right or wrong, your pricing needs to be competitive not only with the actual pricing of others in your industry, but what consumers think  your service should cost.
• Identity. Your pricing needs to reflect who you are, and not all successful business sell premium products. If Wal-Mart or suddenly raised all of its prices drastically, they would no longer be who they are. They would not be fulfilling the promise of their brand. The profit margin they gain from raising their prices will be lost multiple times over when traffic to their stores plummets because their base can no longer afford them. Advising every business to raise their rates follows the same flawed, simplistic logic.

Exceptional businesses take pricing seriously. Here is how you can start to do the same:

Setting Price Strategically

Step 1: Gather the right inputs

You can’t set good prices without data. Start by collecting the facts:

• Your costs. Materials, labor, marketing, overhead, your own time. All of it. If you leave something out, you’ll underprice without realizing it.

• The market. What do competitors charge, and how does your offer compare? This helps you establish a reasonable floor and ceiling for your prices, but be careful to choose the right competitive set (e.g., Old Navy would never price like Banana Republic which would never price like Zegna, even though they all sell clothing).

• Customer perception. What do customers in your space actually value? What are they willing to pay more for, and what do they see as interchangeable?

If you skip this step, your pricing will always be based on guesses, rather than facts.

Step 2: Get clear on your positioning

This is the soul-searching part. Where do you want to sit in the market?

• Ultra-premium. You’re the rare, high-end choice. You are highly differentiated from your competition, and that difference is something that consumers are actually willing to pay more to access.

• Middle market. You’re the steady, reliable option. You are priced competitively relative to other options, but you can think of your price as "neutral:" it's not going to be the reason someone chooses you, but it is also unlikely to scare the average consumer away.

• Commoditized. You compete on price and efficiency. Your difference is how quickly and cost-effectively you can get the job done, without the bells and whistles of higher price tiers.

There’s no right answer. There are multi-billion-dollar companies who fit into every single one of these tiers, but you cannot be all of them. If you don’t pick, the market will pick for you (and we bet you won't be happy with the result).

Step 3: Match a pricing strategy to your brand

Once you know your positioning, choose a pricing approach that reinforces it.

• Everyday low price. Consistently low, no gimmicks. Works if your brand is about reliability and volume.

• High-low. A high anchor price, with promotions layered in. Works if your customers love the feeling of a deal.

• Premium pricing. High price, no discounts. Works if you’re backing it up with high-value differentiation and brand strength.

• Tiered or bundles. Different levels or packages for different buyers, without cheapening the core.

The strategy you choose should strengthen your positioning, not undercut it.

Step 4: Run the numbers

Now check the math. Will the price you’ve set cover your costs, leave profit, and support growth?

If not, you’re left with two choices:

• Revisit your strategy and positioning, or

• Fix your cost structure so your chosen strategy works

This is where many small business owners realize the problem wasn’t pricing at all. It was costs, capacity, or retention. Pricing just brought a strategic gap to the surface.

Step 5: Keep evolving

Pricing isn’t set once and forgotten. Costs shift. Markets move. Your brand evolves.

The businesses that win are the ones that revisit pricing regularly. Not in a panic, but as part of their growth process.

The Bottom Line

“Raise your rates” makes for a nice Instagram post. But real businesses need more than slogans.

The right way to set your price is to gather the inputs, decide your positioning, match a strategy, check the numbers, and keep evolving. Do that, and your pricing becomes an asset, not a guess.

If you want support building a pricing strategy tailored to your business, that’s exactly what I help owners do inside Maverick Growth Academy coaching. Reach out, and we’ll figure out the numbers, the strategy, and the positioning that makes sense for you.