Pricing, in Five Moves

Five ways to price anything, in ascending order of courage. Spot the move you are in, and the climb to the next.

// Field Guide 02

Pricing, in five moves

Five ways to price anything, in ascending order of courage. Spot the move you're in, learn when it's the right one, and find the climb to the next.

Click any move to open it. Hover a term for its definition.
Answer a few questions, get your move ↓
Start Something to sell. A cost you know, a value you don't.

What this move prices: your inputs. It requires knowing only your own numbers. The billable hour is cost-plus with a timesheet.

// Spot it
The proposal has a rate card in the appendix. The negotiation is about hours and day rates, never about what the work is worth. Efficiency gains quietly shrink your own invoice.
// Works when
Outcomes are hard to measure, trust is young, or procurement runs the show. Custom one-off work with real uncertainty. It is the honest move when nobody can predict the result.
Markup & margin Time & materials The billable hour Rate cards Break-even Cost accounting
// The honest limit

It punishes your own efficiency: get faster and you earn less. And it tells the customer your price has nothing to do with their outcome.

// The climb
Take your most repeated service, fix the price, and eat the variance. A fixed fee is cost-plus with the timesheet hidden, and it starts teaching you what work is worth instead of what it costs.

// Related: When Time and Materials Go to Zero · what happens to this move when AI takes delivery cost toward zero

What this move prices: the competition. You stop looking inward at cost and start looking sideways. Most pricing in the wild is this move plus a discount.

// Spot it
There is a competitor pricing spreadsheet somewhere, updated quarterly. Your price ends in the same digits as theirs. Sales asks for discount approval more often than it asks about value.
// Works when
True commodity markets, price-transparent categories, or entering a market where the buyer already holds a reference price. Sometimes the market has done the work and matching it is simply efficient.
Competitive benchmarking Penetration pricing Price skimming Price matching Positioning Commoditization
// The honest limit

You have outsourced your price to competitors who are guessing too. And matching quietly concedes that nothing else about you is different.

// The climb
Pick the one segment where you are visibly different and stop matching there first. Differentiation you don't price is differentiation you are giving away.

What this move prices: the customer's outcome, estimated. The question changes from "what does this cost us" to "what is this worth to them," and everything downstream changes with it.

// Spot it
Your deck has an ROI slide. Your tiers are named good, better, best. Price conversations start from the customer's business case instead of your rate card.
// Works when
The value created is large, provable, and varies widely by customer. Business buyers with measurable impact. It demands the muscle to actually research willingness to pay rather than assert it.
Willingness to pay Value metric Segmentation Good-better-best ROI case Price discrimination
// The honest limit

Value is estimated, not known. In practice this often means "we asked what you would pay" with better slides, and the segmentation it depends on almost never gets finished.

// The climb
Find the one metric that tracks the value you deliver and attach a meter to it. When the value metric and the billing metric become the same thing, you are ready for move four.

What this move prices: activity. Pay-as-you-go aligns the bill with use, lowers the barrier to start, and turns pricing into a product decision: what exactly does the meter count?

// Spot it
The invoice varies month to month. Finance complains about forecasting. Your pricing page has a calculator on it.
// Works when
Value genuinely scales with consumption, your marginal cost is low, and customers distrust big upfront commitments. Infrastructure, APIs, anything metered by nature.
Metering Seats vs usage Credits & commitments Freemium Expansion revenue Bill shock
// The honest limit

It transfers revenue risk to you: in a bad quarter, customers turn the meter down and your forecast goes with it. Aligned, yes. Predictable, no.

// The climb
Move the meter from activity to result: from API calls made to tasks completed. The closer the counted unit gets to the customer's outcome, the closer you are to move five.

What this move prices: results. The seller takes on the customer's risk and charges for carrying it. AI is dragging services pricing here fast, because when effort gets cheap, effort stops being worth paying for.

// Spot it
You get paid when the thing happens: placement fees, success fees, per-resolution contracts. Your revenue line moves with your customer's results line.
// Works when
The outcome is measurable, attributable, and mostly in your control. Recruiting, collections, performance marketing, and now AI agents doing bounded jobs.
Success fees Attribution Guarantees & SLAs Risk sharing Per-resolution AI pricing Contingency
// The honest limit

It only works when the outcome is measurable, attributable, and mostly in your control, and you rarely get all three. The frontier of pricing, not the baseline.

// The climb
There is no move six. The climb here is discipline: define the outcome contractually, instrument attribution before you sign, and price the risk you are absorbing, not just the result.

// Related: Field Guide 01: Agentic AI, in five stages · the systems that get priced per outcome

Where this is heading Effort gets cheap; results get priced. The seller carries the risk.

One project, five prices

The same engagement, priced with each move. Watch the number change, and watch who carries the risk.

The job: automate a client's invoice processing. Your cost to deliver: $40k (it was $120k of billable time before AI). Client's expected gain: $500k in year one.

Who carries the risk
BuyerSeller

Which move should you be in?

Four questions. Answer honestly; the guide does the rest.

Do you know what the work is worth to the customer, not just what it costs you?

Does the value they get scale with how much they use it?

Can you measure the outcome and prove your work caused it?

Would you bet your fee on the result?

// Your move

Open the move ▸

What runs underneath

These don't belong to one move. They run underneath all five, and they decide whether any of it holds up in the room.

Psychology

Anchoring Decoy effect Charm pricing Free Loss aversion

Discipline

Discounting policy Price increases Grandfathering Indexation Gross margin

Mechanisms & power

Auctions Dynamic pricing Pricing power Switching costs Regulation