I’m not a big fan of pickles.

Not the pickles you eat, or the pickle you find yourself in when you’re stuck between two bad choices and both outcomes suck.

Let me explain…

Our cold email agency charges a $500 a month tech fee and $150 per qualified lead.

The $500 a month tech fee is at cost, meaning we don’t make a dime.

The benefit of this tech fee is that it’s low enough for prospects to say, “Yes, let’s get started,” without hesitation.

Well, that was the case until this happened…

Over the past 90 days, our business has exploded.

Revenue-wise, client-wise, results-wise.

So it was time for my business partner and me to put on our big boy pants and look at the numbers.

Eeek.

Turns out the cost of scraping and enriching data for our clients has climbed.

Maybe it’s inflation, maybe it’s software companies being dicks, or a little bit of both.

We’re still profitable and chugging along.

But the eeek part came from the realization that we were actually losing money on the tech fee.

The solution is obvious: raise prices.

But what wasn’t obvious was the insane amount of resistance we’d get from trying to close new clients at double the tech fee.

From $500 to $1,000.

I mean, $1,000 has an extra digit compared to $500, right?

Back to the pickle.

We found ourselves needing to charge new clients more, which lowered our close rate.

But if we didn’t charge more for the tech fee, we’d slowly be losing more and more money.

What to do?

Well, I started looking into the psychology of pricing and stumbled upon two interesting concepts:

1. The Image Effect: Non-round numbers and decimals can signal to our brains that a product is discounted, competitively priced, or a bargain.

2. Precise Pricing: Using specific, seemingly random decimals (like $7.73 or $298.37).

This makes the brain think the business calculated the cost down to the penny based on production margins, making the price feel more honest and credible.

Interesting, right?

Now, our tech fee depends on the client, market, and offer.

But we started charging $893.78.

It worked like a charm.

Instead of saying, “$1,000 is at cost,” we say:

“$893.78 at cost. Happy to send you a breakdown of where the tech cost is allocated.”

At $1,000, prospects were suspicious, even if we offered to send a breakdown.

$893.78?

They ask us to send the Stripe link.

My point in this pickle pricing nonsense:

People don’t just buy based on what something costs, they buy based on what they believe it’s worth. A round number can feel like a price you pulled out of thin air.

A precise number can feel like a price you calculated.

Of course, that precision needs to be backed by numbers if someone asks.

But the next time you’re struggling to sell something, try experimenting with how you present the price before you start discounting it. Because sometimes the difference between a prospect saying “too expensive” and “send me the link” isn’t the price.

It’s the story the price tells.

Hope that helps,

Parker

​https://useironpeak.com/​