What Should I Charge?

Why That Number Isn't What You Should Be Asking?

What does the market bear? What does your competition charge? What do you think you can get away with? These are the three questions most founders ask when they set a price, and Ed Lee has spent the last decade watching them lead people straight into underpricing themselves.

Ed is the author of The Last Mile of Trust and has worked with over two thousand companies on how they price what they sell. For years he watched founders carry the same insecurity into every pricing conversation, shrinking the number the moment a client hesitated. Then he started to see that insecurity eroding the very thing that made his clients worth paying for.

In this conversation, Ed makes the case that what someone pays is directly tied to what they believe they are getting, not to what the comps say. A consultant pricing at $3,000 because that is what the market shows, while delivering $50,000 worth of transformation, does not read as a deal. It reads as a mismatch, and mismatches make buyers walk away, not the quoted price. Ed shares how to find the right number for your business. It’s not the number he says, it’s how much they trust you.

Ed and I have worked together for the last year, and what stands out about him is that he is unapologetic about needing time with his family. His business supports his life, not the other way around, and I watched him live with that friction and resolve it one step at a time. The friction he feels when charging what he is worth is the same friction he faces every time he puts his family first. It’s an investment for him. 

If you are tempted to price something by asking what everyone else charges instead of what you are worth, this episode is worth a listen. You will walk away with a way to find your number, and proof that facing friction instead of running from it is what makes the number hold.

Chapters:
00:00 Cold open — Pricing builds trust, not just numbers.
00:46 Intro — Beate welcomes Edward Lee, author of The Last Mile of Trust.
03:32 The friction myth — How “frictionless” can erode your secret sauce.
04:52 Price as identity — Your number signals value, impact, and trust.
08:39 Adobe case — Subscriptions, AI add‑ons, and when features backfire.
12:40 Pricing as a filter — Qualify ideal customers; repel discount‑seekers.
14:41 Values and balance — Family, presence, and the workout analogy.
23:33 Evolving the offer — How Ed reshaped Hello Advisor’s pricing and model.
27:14 Book + key takeaway — Where to get it, toolkit bonus, and why price is the last mile of trust.

About  Ed Lee 

Ed Lee is the founder and CEO of HelloAdvisr, a pricing strategy consultancy, and the author of The Last Mile of Trust. He has advised more than 100 high-growth companies on pricing and monetization, with a combined valuation exceeding $1.4 billion. He teaches at UCLA, serves as expert-in-residence at Oxford University's Saïd Business School, and hosts the Margin for Error podcast.

Connect with Ed Lee

Website | LinkedIn | X | Instagram |Instagram 

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Transcript

SPEAKER_00 0:00

Most entrepreneurs think the job of pricing is to close that gap by just being cheaper or clever enough, and that really is not it.

SPEAKER_01 0:09

That's not a three thousand dollar value. It really isn't. Now suddenly I am not believable because then somebody says, Well, if that's what she does, why is she only charging $3,000?

SPEAKER_00 0:23

Not everyone is your customer. And when we try to make it for everybody, it becomes for no one. Price is not the number itself, it's not necessarily an obstacle. It's the trust and the way that you're trying to build trust towards that price. Pricing is one of the most powerful tools that any business has for building that trust.

SPEAKER_01 0:46

Ed Lee with us today, the brand new published author of The Last Mile of Trust, personal friend and mentee of mine. And I couldn't be more thrilled to be here with you today, Ed, to ask you some tough questions about something you're incredibly passionate about, and that is pricing. So I want to start with a question that I've been uh pondering over. So everybody talks about friction, right? There's too much friction in your business. There is, we need to get rid of the friction when we make purchases, the point of entry has to be low. What's the big deal about friction?

SPEAKER_00 1:25

First of all, Beath, thank you so much for having me. It's definitely an honor to be here with you to have this conversation and definitely with your audience. So, what is the big problem with friction? That's a great question. And it really starts with kind of watching what happens when you actually do it. I work with a lot of high-growth companies, tech companies, investors, and I fully bought into the go, go, go, reduce friction, reduce friction, reduce friction. And at some point, I looked up and I realized that it really isn't serving anyone. It wasn't serving my clients, it wasn't serving the people I actually want to help. And one of the things I started to discover, and it's just my own self-awareness and my own journey, is that it was really just disconnecting what entrepreneurs and business owners were building and the incredible things that they were building and the amazing impact that they were having on the people that they work with, their customers, and even the people that get impacted by those customers and the actual worth that they're creating. So they get caught up in this rat race of sameness, feeling like they have to simplify everything down to the lowest common denominator just to be seen. And what that does is ultimately it erodes the very thing that made you different in the first place. It's your secret sauce, what makes you special. And so when I see that and this running away from friction, it loses an important signal that's absolutely critical to help you not only to build a successful business, but also build the pricing that your customers will ultimately see.

SPEAKER_01 2:59

I started reading your book and you said something along the lines of that you can either price it because everybody else prices it that way, or go down the road of what you think the market bears, right? You know, clacking on bushes and shaking the tree and seeing how you compare to anything else, or you can do something completely different. Will you share with our audience what that other thing is and why the first one is in your world a really terrible idea?

SPEAKER_00 3:32

So I've seen over 2,000 companies and just over the last 10 years. And one of the things is universally true. Every single one of them thinks that they are building something better. They are building something that will have more impact, drive greater, greater results. By definition, it means that they are different, unique, special. And so when we are looking for our pricing, we start to our brains start to split into two directions. There is the builder, the creator, the entrepreneur, the creative in us, and then there's the business side. And then we start to doubt ourselves. We ask ourselves the question of is it actually worth what I think it's worth? Does it in fact have that much impact? And so we start to ask and look for all of these other data points, other people's data points, which effectively is other people's prices. And so a lot of times, a lot of these business owners and entrepreneurs that I speak to, they run away from that question. They try to treat it like two separate things, but our customers don't see it that way. These are one and the same. That price is a representation of who you are. It is a representation of what you value. It's also a representation of the impact you plan to have on their lives. I like to think of it like a great relationship or a great partnership. These things take time. It takes a lot of understanding, it takes a lot of communication. And that's where depth is created. That's where value is created. And so again, when I think about value, I think about not only the value that you as a business owner gives to your customers, but also the value you feel that you're creating and being able to communicate that through your price.

SPEAKER_01 5:31

So the value, right? Everybody runs around through our lives and we're like, we just want to be valued. We want to be seen. We want to other people to appreciate us. Yeah. Is there a discrepancy in us saying that and us actually showing up like that in our pricing?

SPEAKER_00 5:48

Absolutely. This is kind of the two brains that I think we as business owners and entrepreneurs oftentimes have. We know and we spend the nights and weekends, the countless hours building something that we feel and we know will have tremendous impact and have that value. But when it comes to then communicating what that means, not just through marketing speak, but through a number or through a pricing model, it's entirely something different. And so again, I think it's one of those things that that points of friction that we oftentimes wrestle with that we want to just defer. We want to just kind of punt it over here. And it's one of the most important things. I mentioned earlier, I like to think about it like really great food. And building a great dish, it doesn't happen fast. It takes time, it takes iteration, it takes a degree of creativity. And that depth is exactly what makes that special. It's difficult to replicate and it's difficult to break. So when we start to discover and design a company's price, it's really that same discovery. And so what we're really trying to define when you're trying to define value is what your customer trusts in terms of what you're planning to deliver. And when you do it right, you have a customer who trusts you for life. And these are the amazing companies and brands, whether you are a big Fortune 500 mainstream brand or an independent consultant that you have that unbreakable. And so have that discovery becomes uh both kind of the magic, but also where that friction kind of comes into play. And being able to work through that friction is where a lot of that magic starts to happen.

SPEAKER_01 7:34

There has to be a personal experience in there that made you have this realization. So, what was that personal realization in your own life where you started thinking about value and friction and what matters and what you needed to charge to make it all worthwhile?

SPEAKER_00 7:51

I work with a lot of high-growth companies and they move very, very quickly, especially on the product side. And so I started to really kind of believe in this. Let's just make it simpler, let's make it simpler, faster, faster and faster. And what I started to realize is that a lot of these businesses and a lot of these leaders, they were losing starting to lose kind of the nuance of what made them special. And rather than trying to go deeper and build better relationships with the market and their customer, they tried to wrap it with other things, as if our customers wouldn't notice. And it became to a point where they started to lose what made them special, what made them display.

SPEAKER_01 8:39

Oh my God. You know, you're talking about the over, the the the the building it out to justify the pricing, which, as you very well know, is one of the things that drives me absolutely bonkers. In your book, you to you take the example of Adobe, and you said, you know, when Adobe first switched over uh from the desktop option to the subscription model, there was an uproar. Well, their primary audience were filmmakers, photographers, so there was the creative audience, and they're all broke anyway. Or most of them are, but they're creative. So they created this expensive subscription model. 33 million subscribers later, it is considered a success story. However, what is happening now is their stock went down 70% because they did exactly what you say, or what you warn about, is they decked it out with all these things that now justify their investment that they made into AI that the customer doesn't even want. So talk about how companies completely screw it up at this point.

SPEAKER_00 9:42

So there's a couple of things from that story, and I'm glad you brought that up. But the first thing is that recognizing that sometimes the person you think is your customer today is not necessarily going to be your customer tomorrow. That's that's the first thing. The second thing is also the recognition that not everyone is your customer. And oftentimes, this is also where things get disjointed. The product could be for more people, but your pricing is not. And your pricing is designed for a certain type of customer. And when we try to make it for everybody, it becomes it's for no one. The other part of this is also kind of recognizing, and again, trying to get a little bit deeper into understanding your customer, is that fundamentally that you know, that the things that they care about, what are the things that actually uh do they do they actually value? We as business owners, we often think in terms of features, you know, does it, you know, does it do this new thing, this shiny thing, AI being one of those things? Interestingly enough, just to go on a slide tangent, there was actually a study done where for when you originally when you know AI started to really start to take off that uh by adding AI actually decreased willingness to pay by anywhere from 25 up to 25% in terms of what the willingness to pay for your product is. And partly was because they didn't understand it. And this leads to the other part. When people think about pricing, they think about the math, they think about the quantitative side. And don't get me wrong, it that is absolutely important. But the other part is the communication. And sometimes communication takes several steps. Sometimes it is through a singular event. Whatever that may be, there has to be a degree of communication. And we hear this all the time. We see it in markings logos, we see it in branding, we see it in demos, we see it in all site types of things. Taste tests when you go to the supermarket for that new chip or that, you know, that new salsa. All of those things are part of that communication to try to start to understand value, to give them experience and so on. And so the things that companies often think about is they skip the not only who is it for and why, they jump straight into, I got to figure out this number. And then they forget the communication piece. How do you start to execute? How do you start to bring that pricing to life in all the different touch points and interactions you have with your customer? And this oftentimes gets lost because it gets so siloed into what businesses do.

SPEAKER_01 12:17

So, to your point about communication, I mean, you you you kind of can't do that. Although you do say in your book that sometimes that is a decision you have to make to get rid of a particular type of client that sucks up your time and energy. So let's talk about that. And where that comes in helpful, because I do think it's important that we discuss this.

SPEAKER_00 12:40

Yeah. And I think one of the things I like to say to business owners is one of the first questions I generally ask: what is your pricing designed to help you to do? And it usually takes most to business owners by a little bit of surprise. They didn't really think about it. They thought about it, like I said, as a math exercise. For some businesses, they use pricing to be able to not only weed out certain types of customers, again, those that don't use the product in a certain way, those that don't value the product or the service in a certain way, they suck up your time disproportionate to other clients or customers. And so it could be a tool that you use in order to determine who values what it is that you're building and those that do not. Those that are going to be constantly asking for a discount, that will be asking for more support, that don't get it, don't get the way that you see the world and the way that you want your product or service to be used by these types of users. And this happens with big companies and smaller companies. They'll use it so that, you know, they will be able to determine who are the higher value customers that they can truly build partnerships and relationships with. But we also see this with subscription services, like the example that you gave. But in the past, you'll see the likes of Netflix who will use price increases not just for the financial gain, but they'll use pricing to be able to determine how much value and willingness to pay do customers have. And this is not just for financial gain, but do they indeed see the product and the price as one? And so again, it's it's an important step that a lot of businesses don't think about when they think about what I can do with pricing and why am I going to price it in this way, other than the fact that someone's asking me how much this is this amazing thing that you built, how much does that actually cost? And and pricing can do just so much more than that.

SPEAKER_01 14:41

I love that. So I want to get personal now with you. As we sort of worked together for this last year, and I got to know you a little bit, what really stands out about is your own value system. Can you share how your own personal value system, your family, your personal time with the things that you want to do and be able to do has to factor into what you do? Because you struggled with that for a little bit there.

SPEAKER_00 15:12

I did. And kudos to you for really a lot of your guidance on that as well. But I think most entrepreneurs in particular can empathize with this, that part of the reason why we became entrepreneurs is that we had this uh perhaps delusioned belief that you can have more balance between family or personal life activities, as well as this work that we are so passionate about. And but as I started to kind of get into building my company Hello Advisor, I recognized that I was in love with it. But it was also taking a toll on other parts of my life, namely, as you mentioned, my family, especially my two adorable kids. And I was missing out. And so I recognized, being a son of an entrepreneur myself, that those are cherished and important times. And so rather than kind of compartmentalizing, which is what I tried to do, this time is for this, this time is for that, family and work. I started to think about it more in terms of investment. How can I invest it in my time, my effort, my energy, actually, just my presence, just my being present for either of those things and finding different ways to do that. And the other part of it, and I and I uh have to bring it back to pricing, is that I think about it like a workout. It takes consistency. There's gonna be good days, there are gonna be bad days. There's gonna be days where, hey, listen, I plan to work out four days a week, and in reality, I can only do two or three. You don't beat yourself up about it. You find ways to continue to be more consistent, find, you know, ways that you can work better. And so for me, and you probably know this better than most, for the last year, I've been able to balance building a company, writing this book, launching this book, with also spending time with my children and their activities, including sports, including all the wonderful things they do at school, also recognizing I have very little understanding of Mel, some of the things that they do, but just the joy of just being there and being present for them. So, like I said, I think of it like an investment. Like, how can I invest more into the things that I love and doing it in the right way and getting out of this whole kind of hustle mindset of listen, it's just about grinding. It's just about doing more. And that's just not the way that was very healthy for me. And I don't think it was really serving anyone, whether it be my family, my friends, or my business.

SPEAKER_01 17:55

So, what I'm hearing you say is that there really was a part of the friction that helped you to identify the pieces of the friction, and then that led you to solving the issue.

SPEAKER_00 18:10

I think the way that I think about, and and again, uh if you don't mind, I'll kind of reference you a little bit, is that the places that we feel probably the most uncomfortable where that friction kind of comes to play is really where the most important work is. And being able to tackle those moments and understanding and not running away from it, it's okay to be scared, it's okay to have those that feelings in your in the guts of your stuff, in the gut of your stomach. But it's it's okay. It's not a question about avoiding it, it's about being able to embrace it and to being able to find kind of navigate your way. So if I kind of go back to that workout example, this and this is something that I like to often speak of, is that just getting out to the gym, getting out to the track or whatever your form of fitness may be, that in and of itself is hard. And doing the first 10 or 15 minutes, that's doable. But finishing that workout becomes a lot harder. Coming back the next day when you're sore and your calendar is full, that's when most people stop. But coming back consistently, pushing to be a better version of yourself each time, that is really where leaders start to live. And so this is where you start to find that balance. You understand what you're capable of. It also helps you to prioritize. So, you know, that's the way that I kind of think about it. And if I was to give you a little bit of credit here, I am my workout regime has also gotten a lot better over the last year. So my fitness has gone up.

SPEAKER_01 19:43

I think that this podcast is really incredibly self-serving because I do catch myself and make sure you do the same thing, is we tell other people something, and then when we hear ourselves talking to them, we go like, I should be doing this myself. And you recognize how easy it is to become really a hypocrite and to recognize this so clearly, and then to do the application in your own life. And when you just said when you're really in this uncomfortable spot, sometimes to not run away, that is very likely something I would have said to you. And uh, I am now in this incredibly uncomfortable space, and all I want to do is not be here, and maybe the answer is to not run away and to lean sort of into this. So, how did this personal challenge of wanting to be a better partner, a better husband, a better father, and to be present? How did that then shape this conversation, your internal conversation of value? I know the is sort of the answer, but I want you to say it out loud. Is like when you get clear about this on the one side, what happens on the other side? What are you forced to do?

SPEAKER_00 20:53

Yeah. I mean, when I think about the non-work side of things, then I quickly realize what is it that I actually value? Who is it that I'm trying to be? What is most important to me? And these are a lot of questions that I've never really asked. I I thought about work and building a business as something you do. And it is certainly a craft and a craft that I'm extremely proud of. But the question was why? Why and why is that important? And so when I start to think about that, it starts to kind of reframe, it starts to say, not just how can I work better or more efficiently, or and and that type of thing, but also to be able to say, where do I find the most joy? And where can I find kind of my kind of center or grounding? It's not always the most comfortable space. And actually, actually, even speaking of this out loud is slightly instill uncomfortable, but it's One of those places where I'm constantly trying to learn, trying to get better, and trying to not take shortcuts. Um and this kind of brings me back to some of the work, some of the book ideas, is that a lot of the most important breakthroughs actually take a lot more time than people think. And for us to try to quickly get out of uncomfortable spaces goes to solutions that are oftentimes really kind of diluted and watered down because it has to be for the masses and not for you. That's not to say that you shouldn't be guided, and that's not to say that you can't have a system or that you can use to go through that journey. And I I think you absolutely should. But at the same time, it's not one that should be avoided because you're going to build better relationships, whether it be with your customers or client, but also with your family and with your personal, with your friends and just on on the personal side of things. It is where friction lives, it's uncomfortable. But again, uh, that's where a lot of the magic happens. And a lot of people don't invest in that.

SPEAKER_01 23:12

So when you acknowledge that, was there a transformation where you said, I'm just not doing that anymore, or I'm gonna have to do more of that, or if it is worth my time, I have to charge at least that much? Was there an actual external pricing change, so to speak?

SPEAKER_00 23:33

From a business side, absolutely. When I originally started my business, the starting point for me was no one was actually talking about pricing. Pricing was a thing that you did. It was a checkbox. And knowing that a lot of these large multinational companies that are ubiquitous in our lives, that they are taking a much more strategic perspective when it comes to pricing, I thought we need to get this out to the masses. But I also realized that number one, not everyone was in the right phase of their business journey to be able to use pricing in that way. But more importantly, I needed to align in terms of values, in terms of where pricing sits and how they're going to actually be using it. And inevitably, that started to change my own kind of pricing model. It changed the way that I, the type of services that I offer, the way that I want to work with customers. Just a little bit of background. Part of the reason why my company's name is called Hello Advisor was to try to break down the barrier between an advisor as well with the customer, the client or the business that they're working with. I wanted it to be more of a relationship, to be collaborative, to work together, because ultimately, like most things, pricing doesn't sit still. It's not static. And truth be told, in six months or 12 months, your business is going to get better. And when it gets better, it's going to pose interesting pricing questions, but also new opportunities. So, how do you seize that moment so that you are not only doing it for your business, but also for your customers? And so, again, that's for me, became kind of my aha moment where again, taking my own advice, not everyone is my customer. And I have to be okay with that.

SPEAKER_01 25:26

Yeah, and I think that reading your book and and having really been exposed to you has changed a lot of my perception about this. And when we were in the green room, I told you is that when you ask the question, you know, what is the value that you actually bring to your customer? And I look at the feedback and the testimonials, and what I do is life-changing for people. I mean, it it significantly changes how they work, how they live, the enjoyment of their life. Uh, they are much more aligned with their purpose. And then I'm thinking to myself, that's not a $3,000 value. It really isn't. Now suddenly I am not believable because then somebody says, Well, if that's what she does, why is she only charging $3,000? What's wrong with her? And I think that that really is something that you have taught me in this, in this journey of being in your sphere and watching you write this book and wrestling with all these pieces. And I'm holding a copy up of uh of the book for everybody to see uh as you're watching us online. And uh Apple Podcast is now also a video, so we are now also uploading the video on Apple. Is that I am really honored and very proud of you for having written a really honest book about value that I believe will help people to dive into what is my value? What is the value that I bring to the table? Not a course like that is typically priced as, right? So you have taught me that. So I'm very grateful for that. So for somebody now, uh, where can we get the book? And you also have a giveaway in the book where somebody can go. So tell us everything that we need to know now.

SPEAKER_00 27:14

Yeah, absolutely. The book is available on Amazon and your favorite booksellers, um, all available now in Kindle, um, paperback, and hardback. Also, as a bonus to all readers, there is a special pricing toolkit that we made available to everyone who gets a copy of the book. It actually has a number of um different tools that you can use that actually the book references. It's free for you to use and again use with your own company um in your own business. Um, in addition to that, for all readers, um, you will be able to get a special discounted price for a special offer for the book. Um, and that will be uh made available for all for all listeners as well.

SPEAKER_01 27:59

We'll put all of that in the show notes. And so as we as we're wrapping up the wrapping up this interview, so what do you think is like the most important thing that you want our listener to walk away from this interview about value, their own value in pricing and how they connect?

SPEAKER_00 28:16

Yeah, I'm gonna go back to the title of the book, The Last Mile of Trust. And if they leave anything from this interview, it's going to be that because that's really the final distance between a customer who's interested and a customer who commits. And most entrepreneurs think the job of pricing is to close that gap by just being cheaper or clever enough. And that really is not it. Price is not the odd, the number itself is not necessarily an obstacle. It's the trust and the way that you're trying to build trust towards that price. And ultimately, pricing is one of the most powerful tools that any business has for building that trust. And so I hope that you seize it. I hope that you take power and uh and control of that. And I wish everyone the utmost success.

SPEAKER_01 29:07

That's wonderful. Thank you so much. And and to reiterate on that, in the $40 million blueprint, the second thing in our diagnostic is the offer. And that is the price. So the first thing is the idea, the second thing is how do you bring it to market and how do you price it? This is how important it has always been in our system because everything else builds on that. But you are absolutely correct. There's such little conversation about this that I think people don't know where to start. So I encourage all of you listeners, get the book and read it. Uh, because it is really going to change, even just in the first 20 pages. When you read that piece about how do you value what you do, it really is life-changing. So, Ed, it's been a pleasure to have you on the show. Thank you so much for sharing. And uh, I, you know, it's already a best-selling book. So let's hope it's gonna get on the New York bestseller list as well.

SPEAKER_00 30:11

Yes, thank you so much. Thank you, B, for having me.

SPEAKER_01 30:13

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