Offers and pricing: what you actually sell

A price list is not an offer

Herzog Physio's pricing today: first assessment €80. Session €65. Six-session package €350.

That's a price list. It hands the customer all the work: which of these do I need? Will it fix my back? What if it doesn't? And it hands them all the risk, at the exact moment their honest alternative is "wait and see, with a foam roller and ibuprofen" — which costs nothing and demands no decisions.

An offer is the product plus four decisions: how it's bundled, what its price is framed against, who carries the risk, and whether there's an honest deadline. Same product, same prices, different offer — and the difference routinely moves conversion more than any traffic tactic in the later modules, at a cost of zero. Most small businesses never make these four decisions. They set prices once, in fear, and then spend years buying traffic to send at a price list.

Herzog, rebuilt without touching a single price

Watch what the four decisions do. Nothing below changes what anything costs.

Three moves worth naming. The tiers are named by outcome, not ingredients — nobody wants "6 sessions"; they want to be back on track. The middle tier is designed to be chosen: it's the complete path for the commonest case, flanked by a smaller and a larger option that make it look like what it is — the sensible default. And the arithmetic is honest: €430 is simply the existing €80 and €350 bundled; the comparison prices are real.

Then the fourth decision, the one that attacks "wait and see" directly:

"If after the assessment we don't believe physiotherapy will help you, we'll say so — and the assessment is free."

Risk reversal: the lever most owners refuse to touch

Module 2 taught you that a purchase has forces pushing and forces braking, and that the braking force is usually anxiety. The instinct of every seller is to add pull — more features, more claims. Removing the brake is almost always cheaper and usually moves more people, because the anxiety is specific and a guarantee answers it specifically.

Herzog's guarantee answers "what if I pay and it doesn't work?" Ostara's canonical research found breakage worry — five independent sources of people almost not ordering for fear of shards. Her orders already ship insured; the guarantee that kills the fear costs one sentence: "If it arrives broken, we replace it free." The insurance means a replacement costs Ostara the production cost of one piece, occasionally.

Owners refuse this lever because they fear abuse. Don't argue with the fear — bound it. Herzog's worst case is one €80 assessment per invocation; Ostara's is one replacement piece. Both are known, small, countable numbers. Run the guarantee, count invocations for a quarter, and withdraw it if the count says abuse is real. Now the fear is a measured cost instead of a reason to do nothing.

The arithmetic your pricing fear is ignoring

Here is the calculation almost nobody runs. Ostara, typical month, canonical numbers: 91 orders at €78 average order value is €7,098; at 58% gross margin each order contributes €45.24, so the month's gross profit is €4,117.

Option A — sell 10% more. Roughly 9 extra orders at €45.24 each: gross profit rises about €412 to €4,529 — up 10%, as you'd expect. And those orders aren't free: they arrive via ad spend, content hours or discounts, which eat into the €412.

Option B — charge 10% more. Price goes to €85.80; the cost of the goods doesn't move, so the entire extra €7.80 per order is margin. Contribution per order rises to €53.04, and on the same 91 orders gross profit rises about €710 to €4,827 — up 17%, at zero cost.

The general rule: a price change of x% changes gross profit by x divided by your gross margin (volume held). At Ostara's 58%, +10% price is +17% profit. At Herzog's roughly 70%, it's +14%. At Storkflow's 82%, +12%. The thinner your margin, the more violently price outperforms volume — and the more a "small" discount bleeds.

Of course volume rarely holds perfectly. So compute your cushion: at the higher price, Ostara needs only €4,117 ÷ €53.04 ≈ 78 orders to match today's profit. Volume could fall almost 15% — conversion sliding from 1.4% to about 1.2% — before the rise cost her anything. That is a wide margin for error, and it's why underpricing is the expensive mistake: most small-business prices are anchored on the founder's fear, not on the customer's alternative. Your ICP's costliest pain sets the ceiling; your Lesson 1.5 economics set the floor; fear is not an input.

When raising price is the wrong move

Honesty cuts both ways. A price rise is the wrong move when:

• You sell a subscription and don't understand your churn. Storkflow's churn numbers famously don't reconcile, and nobody knows why customers leave. Raising €89 on 142 existing firms before understanding that is gambling. If Storkflow raises, it raises for new customers first and grandfathers the old.
• Your constraint is empty capacity with low marginal cost. Herzog runs at 68% of ~240 weekly slots. To the extent his therapists are paid either way, a filled empty slot is nearly pure margin — his cheapest euro is volume, and a rise that thins bookings hurts twice.
• Your positioning hasn't earned it yet. Price is downstream of position. If the customer genuinely can't tell you from the alternative, you'll price like a commodity whatever you wish — fix Lessons 3.1–3.3 first.
• You've already sold the promise. Never reprice packages, cohorts or contracts people already bought.

The rules that keep you legal

European consumer law has teeth here, and two rules plus one prohibition cover most of what a small business needs.

The prior-price rule (Omnibus Directive). Any "was €X, now €Y" must state, as the "was", the lowest price of the prior 30 days. If Tomas runs "Back on Track — was €430, now €387", that's legal only if €430 really was the lowest price in the preceding 30 days. Run a deeper discount three weeks ago and that price is your reference — which can make a planned "sale" impossible to advertise as one.

Total price transparency. Mandatory costs — shipping, booking fees — can't first appear at the final checkout step, and B2C prices must include VAT.

Fake urgency is banned. Countdown timers that reset, "only 2 left" hard-coded into a template, "ends tonight" repeated nightly — these are misleading commercial practices, and they poison trust besides. Real scarcity is legal and works: if it's true and provable that six January evening slots remain, say so, with the number. If it isn't true, your offer is evergreen — say that instead.

Now design yours.

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