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You’ve seen it before. Two businesses selling the same thing — the same product or service, and maybe even the same vibe — but one charges multiples times more than the other. And their customers are happy to pay. Why?
The easy answer might be because of their brand. The lazy answer might be because of their hubris. But the real answer is that they are strategic about setting their prices: They understand what I like to call the “architecture of pricing.”
Pricing isn’t a number you guess. It’s something you build.
And if your prices aren’t where you want them to be, it’s not about charging more, it’s about creating the structure to support what you want to charge.
The architecture of pricing is made of three layers: the foundation, the constraints, and the facade.
Inside each layer are specific levers that give your business its pricing power or reveal why it’s stuck. Let’s break it down.
1. The foundation
The foundation is where pricing starts. It holds four components:
The context and perceived value: Value isn’t static. It changes with context. For example, someone might only be willing to spend $1,000 on a website to support a side hustle. But if that same person suddenly loses their job and needs to replace their income, the exact same service becomes far more valuable. Now it’s not a nice-to-have, it’s a lifeline. Same offer. Different context. Totally different price tolerance.
Differentiation: Every business must have something that makes it unique. It could be experience, expertise, process, or results. Without a differentiator, a business must compete on price alone. And from there, it’s a race to the bottom. Your differentiator impacts pricing as we move up in this framework. It helps you stand out in a crowded market (the constraints) and how it gets communicated impacts how your customers may feel about you (the facade).
The delivery model: This is how your solution is packaged and delivered. For example, there are several different delivery models for learning how to play the guitar. From a book that costs $15 to a private instructor that costs $5,000 for the year. Pricing can move up or down based on how quickly the problem is solved (or the customer realizes a transformation) and the effort required from the business to deliver the solution. One interesting thing to note is how you might see one business or person offering all of these things. That’s the beauty of understanding and leveraging your delivery model.
Takeaway
You can’t price powerfully if the foundation is weak. If the problem isn’t real, the context isn’t urgent, the offer isn’t unique, or the format doesn’t match the buyer’s needs, then pricing becomes guesswork. Fix the foundation, and the price starts to make sense.2. The constraints
The constraints are the external pressures that shape what you can charge. You don’t get to control them, but you have to work within them. This includes the level of demand, the competitive landscape, and the financial structure of your business. And none of these operate in isolation.
Demand: How many people have this problem and want it solved now? A bigger market might mean more volume, but it usually comes with more competition and lower price expectations. Smaller markets often allow for higher prices, but only if the pain is specific and the buyer is ready to pay to fix it. Sometimes the most pricing power lives in a niche within a big market, where the pain is clearer, the alternatives are worse, and the customer feels like you’re solving their problem.
Market alternatives: These are your competitors. In other words, it’s the substitutes and alternatives your potential customer can buy. You can’t control your competition, so you have to adapt to it. If viable substitutes exist (especially free ones), your pricing must be justified through better outcomes, ease, experience, or brand.
Cost structure and margins: The cost to deliver your solution is a constraint that will impact your price because unless you’re a venture-capital-backed startup that can lose money for years, you have to charge more than your costs in order for your business to survive. What does it cost you in time, energy, or money to deliver?
Takeaway
You don’t get to set prices in a vacuum. The market sets expectations. Competitors set context. And your margins set the minimum. If you want to raise your prices, at least one of those conditions has to change. The others? You have to work around them or they’ll work against you.3. The facade
The facade is about how your price feels to the buyer. This is the perception layer. Most people treat it like polish, but it can be the difference between getting ghosted and getting paid.
Positioning: This is how you are framed in the market. Are you seen as the premium option or the budget choice? Positioning controls expectations and helps anchor price. To support a higher price, reposition your offer: narrow your audience, repackage it, upgrade your presentation, and show proof that aligns with where you want to play.
Brand trust and equity: Trust closes the gap between what you say and what the buyer believes. A strong brand lets you charge more simply because trust and familiarity reduce perceived risk. How can you seem trustworthy? Content builds familiarity. Social proof like testimonials, reviews, and case studies show that your work gets results. If people don’t trust the outcome, even a fair price feels risky.
Buyer psychology and identity: Pricing isn’t neutral. It signals identity. For some buyers, a higher price confirms this is serious, or premium, or “for someone like me.” For others, it creates friction. You need to understand what your buyer wants the purchase to say about them and then price accordingly.
Takeaway
Positioning explains the price. Trust justifies the price. Identity accepts the price.
How to use this to diagnose (not just raise) prices
When your pricing feels off, don’t just tweak the number. Trace the structure.
- If you’re overdelivering and still undercharging → check your facade
- If your margins suck even at higher prices → check your constraints
- If your offer feels vague or replaceable → rebuild the foundation
The key isn’t to just “charge more.” The key is to find out where your structure is weak—and reinforce it.
If you’re having trouble pinpointing where you should focus your edits, I’ve built a Pricing Diagnostic Tool to help.
Pricing is about structure. Not guesswork.
Now you have the structural and strategic framework to work on pricing your product or services in a way that feels aligned, rather than feeling a vague sense that you aren’t being “paid what you’re worth.”
It’s important to have this underlying strategy locked in before you apply different tactics because tactics are multipliers. And if you’re multiplying something weak, all you’re doing is making it louder. You don’t need a pricing trick. You need a structure that holds. Now you have it.
