Four-Step Offer Pricing Framework
Set a defensible price using costs, market context, customer evidence, and tests
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 5
- Confidence
- 99%
The framework begins with financial viability: calculate direct and indirect expenses, then add a profit margin that makes the work worthwhile. Next, examine comparable offers to understand market ranges, structures, features, duration, and support without copying a competitor's number. Third, gather evidence about the ideal customer's circumstances, prior purchases, unmet needs, perceived value, and willingness to pay through conversations, surveys, search data, and community research. If demand and price do not align, consider changing the audience or offer before automatically discounting. Finally, publish the offer, observe real buying behavior, and iterate. Market response—not personal attachment—validates the price. The process should be repeated as costs, experience, demand, positioning, and business objectives change.
Origin
Extracted from The Jasmine Star Show as Jasmine Star's four-step framework for deciding the dollar amount to charge for an offer.
Core principles
- 01A sustainable price covers costs and includes profit
- 02Competitor prices inform rather than dictate the decision
- 03Customer willingness to pay depends on perceived value and circumstances
- 04A price becomes credible only when tested in the market
- 05Pricing requires ongoing evaluation rather than one perfect decision
How to run it
- 1
Consider your costs
Calculate direct and indirect expenses, including software, materials, team time, personal labor, mentorship, and other investments. Add a profit margin that reflects both sustainability and value.
Pro tip Use a 10-15% target as an initial gauge if no stronger industry-specific benchmark is available.
Watch out Do not omit your own labor merely because no separate invoice is issued for it.
- 2
Compare the market
Research at least three competitors with similar offers. Compare features, benefits, duration, support, positioning, and pricing patterns to understand the market context.
Pro tip Use competitor information to inform your range, not to set your exact price.
Watch out Do not price higher or lower solely because another seller has different experience, followers, or credentials.
- 3
Assess willingness to pay
Investigate what ideal customers have purchased, what remains unresolved, and what value they place on the desired solution. Collect direct interviews or indirect evidence from polls, surveys, search data, Reddit, and relevant groups.
Pro tip Ask about prior spending and unresolved problems rather than asking customers to name your final price.
Watch out Do not confuse enthusiasm for an idea with demonstrated ability or willingness to pay.
- 4
Diagnose alignment
If the proposed price and customer evidence conflict, evaluate three levers in order: the ideal customer, the offer, and then the price. Determine whether the marketing targets buyers with the right resources and whether the offer solves a sufficiently valuable problem.
Pro tip Write a separate hypothesis for each lever before changing anything.
Watch out Do not assume weak sales automatically prove that the price is too high.
- 5
Test and iterate
Launch the offer at a real price, measure customer behavior, gather objections, and adjust based on evidence. Revisit the decision as costs, demand, experience, and business objectives change.
Pro tip Track conversion, profit per sale, refund behavior, sales-cycle length, and delivery capacity together.
Watch out Avoid treating the first price as permanent or changing it after too little evidence.
In the wild
A coach serving recent college graduates may discover that the audience cannot afford premium private coaching. Rather than merely discounting private access, the coach can redesign the offer as a lower-ticket, lower-touch program or target a different customer segment.
→ The audience, offer structure, and price become better aligned without automatically devaluing the coach's expertise.
Before launching a live course experience, Jasmine contacted intended buyers to discuss their pressure points, previous investments, missing outcomes, and the value they assigned to solving those problems.
→ The team obtained aggregate evidence to compare customer expectations with the planned offer and price.
Common mistakes
Ignoring indirect costs
Counting only materials or software can produce a price that fails to compensate labor, team time, and offer-development investments.
Letting competitors set the price
Competitor research provides context, but copying a number ignores differences in audience, positioning, delivery, and value.
Discounting before diagnosing
Weak sales may reflect the wrong audience or an unattractive offer rather than an excessive price.
Is it for you?
Best for
It is best for entrepreneurs pricing a new offer or reassessing an existing offer that is not producing the expected sales or profit.
Not ideal for
It is not ideal when prices are externally fixed or when the business lacks reliable cost and customer information.
From the transcript
“Step number one is to consider your cost. Step number two is to compare to others in the market. Step number three is to consider…”
“Do not set your prices in comparison, but have a general idea of what the market standards are.”
From the episode
How to Price Your Offer to Increase Sales