June 23, 2019

How much should I charge if I can save the client $10,000,000?

Sent by Jonathan Stark on June 24th, 2019

A savvy reader sent in this juicy question over the weekend (name withheld by request, edited lightly for clarity):

Heyo JS, Here’s an interesting one for you: logically, if I can save you $10k right now and I charge $1k, you probably won’t bat an eye at paying it. But… something I’ve been running into lately is this: the larger the first number gets, the more people balk at paying the commensurately-higher second number. If I can save you $10,000,000 and I charge you $1,000,000, you’re more likely to shjt a brick than to pay it. What’s going on here? Logic says there’s no difference, but we both know logic doesn’t come into pricing and money as often as we’d like it to. Thanks!

I have three takes on this situation:

Fun question!