How to Raise Your Prices (Part 2 of 3)

_{[Read time: 5 minutes]}

Raising prices is uncomfortable.

You’re not alone. Even experienced founders wrestle with it.

But if you want to price with confidence and sell with conviction, there’s one thing you need to master:

Frame the value.

Notice I didn’t say “add more value.”

As we covered in Part 1 of this 3-part series, value is a dependent variable — it’s the result of perception, context, and realization.

You can’t control value directly.

You only control the inputs that shape how it’s seen and felt.

So if you want to raise your prices, don’t “add value.”

Change the conditions that determine it.

There are 3 levers that let you do that:

(And if you haven’t read Part-1: How Pricing Actually Works — From First Principles, you should go do that now)

Lever 1: Change the buyer’s perception of the outcome

Revenue is generated at the acceptance of price.

And that is driven by how they interpret the meaning of your offer — not what you do, but what it does for them.

Perceived value. I’m not telling you anything you don’t know.

But what I’ve learned is that most struggle to uncover it.

They focus on first-order effects — the direct outcome.

But deep perceived value lives in the second-order and third-order effects: the outcomes behind the outcomes.

Here’s a great example from Confessions of a Pricing Man:

You’re the CEO of a company that designs air conditioners for long-haul trucks. You want to raise prices, but need to better communicate your value — so you commission a study.

Here’s what it finds:

• The first-order benefit is obvious: it keeps drivers cool and comfortable during long trips. Valuable — but not necessarily framed in a way that screams “buy.”

The real value lives in the next question: “What happens when drivers are cool and comfortable?”

That’s where the second-order effects kick in:

• Second order effects: Comfortable drivers have fewer accidents and have fewer sick days.

These lead to measurable savings: lower insurance premiums, less downtime, and reduced operating costs.

That’s the real value. But it had to be revealed — not assumed.

Much of the value is often hidden — you’re job is to shine the flashlight in the dark, not stretch the truth.

So if you want to raise your price, ask:

• What’s the downstream impact of this outcome?

• What does this unlock or prevent?

• How would this change the buyer’s world long after it’s delivered?

You’re not just changing the price. You’re changing the meaning of what they’re buying.

Lever 2: Better the outcome — in line with what your clients care about

Price increases when the burden goes down and confidence in the outcome goes up.

Sure, it’s easy to say “deliver better outcomes.”

But here’s the nuance: better only matters if it’s what the buyer cares about.

You can make your service smoother, simpler, or more robust.

But what if they care most about speed?

You figure this out by on-going discovery (not just discovery at the start).

It’s easier (and more cost-effective) to grow with your current clients than to land new ones.

So here’s the move:

Ask your clients, “What are we doing right?”

Their answers tell you what they value most — and how they judge your impact.

That’s your blueprint.

• If they praise your speed — go faster.

• If they rave about clarity — make it sharper.

• If they talk about peace of mind — build in even more certainty.

You don’t raise price by adding or just improving, you raise it by aligning.

This insight came from Mike Michalowicz — and it applies beautifully to pricing.

Lever 3: Change who you sell to — and what’s at stake for them

Let’s go back to first principles: Value is contextual.

The same offer can feel expensive in one room — and like a no-brainer in another.

That’s not positioning fluff. That’s pricing logic.

If the stakes are low, your price will feel high. If the stakes are high, your price will feel obvious.

So yes, the best way to raise your price may be to change the room.

You shift your market, not your model:

• Sell into higher-stakes use cases

• Target moments where timing is critical

• Narrow to buyers who already know this result matters

But let’s not sugarcoat it — this is the hardest lever to pull.

It means letting go of the “safe” clients.

It means repositioning how you show up.

It means entering markets where expectations (and rewards) are higher.

Sure it’s risky. But along the way your skills have grown. Your insight is deeper. If the players within your market haven’t kept pace — your price will always lag behind your value.

You don’t always need to change your offer.

You just need to bring it into a room where the stakes match your skill.

Frame the value. Price with confidence. Sell with conviction.

When someone says “add more value,” pause.

Value is not a lever. It’s the output of what you actually change:

• Perception

• Outcome

• Buyer

Want to raise your prices? Pick a lever. Then work backward from it.

Next week is Part 3: How to Protect Your Price — And Make It Stick.

We’ll explore the drivers behind pricing power.

See you next week.

— Peter

P.S. If your price feels fragile, inconsistent, or hard to explain — I can help. I run a 1-week Pricing Audit that reveals what’s working, what’s not, and what’s holding your price back. Reply and I’ll share the details.