Why do I talk so much about magic when I work with pricing?

“May I ask you something?”, my customer asked me hesitantly. 

“Of course you may”, I answered with a smile – looking forward to what it was he clearly had been debating over whether or not to share with me.

“… Why do you ask so many questions about magic?  Like, when you’re asking about pricing?  It doesn’t really seem to have anything to do with prices?”

As I settled into my chair with a huge smile on my face I felt a slight twitch in my stomach, reminding me how much I love doing this type of work.

So why DO I talk so much about magic when I talk about pricing?  It’s all numbers really?  Like why am I having conversations at all?  Why don’t I just look at a spreadsheet and go from there?

Well, I do look at spreadsheets.  In fact I can get excited like a 5 year old on Christmas morning when a fresh set of data has arrived for me to play with.  That’s not the point though.

The point is that pricing is NOT about the numbers.  Pricing is about how much magic you create for your customers.  And about which price you can charge for that magic.

Let me put that in a formula for you:

Pricing is the function of the amount of magic your company creates for your customer.

Boom!  That’s it!

Ok ok.  Let’s get into that.  A price is never just a number.  It is a reflection of the value that you provide in exchange for money.  The more value you create, the more money you can ask for that in exchange.

When we talk about value, I like to use the word magic to illustrate how MUCH that can in fact be.  If you can give your customer a MAGICAL experience, you can ask for a way higher price than if you offer them an ‘average-Monday-morning-drop-the-children-off-at-school-before-work’ typical grind experience. 

If I want to understand how high your price can be, I need to know how much magic you create for your customers.  Not just how much YOU think you create for your customer.  How much magic YOUR CUSTOMER thinks you create for them.

“Aha,” he said, ‘now I get it.  Yeah.  That makes sense.”  He concluded clearly in thoughts looking up to the ceiling pondering about all the magic he created for his customers…


Price = f (Magic)