Quick Answer
For search, voice, and "just tell me what to do".
AI price analysis examines your costs, competitor pricing, customer willingness to pay, and value delivered to identify optimal pricing. Most small businesses underprice by 20-40%, leaving significant profit on the table.
Key Takeaways:
- Underpricing is the most common pricing mistake
- AI calculates true cost basis most founders underestimate
- Value-based pricing beats cost-plus pricing
- Small price increases have outsized profit impact
Playbook
Calculate true fully-loaded cost of delivery (including your time)
Research competitor pricing across quality tiers
Survey customers on value perception and price sensitivity
Use AI to analyze pricing-volume relationships from your data
Test price increases on new customers first
Monitor conversion and retention at different price points
Raise prices gradually until you see meaningful resistance
Grandfather existing customers if relationship matters
Common Pitfalls
- Pricing based on what you'd pay, not what market will pay
- Ignoring hidden costs in your delivery
- Competing on price when you could compete on value
- Raising prices without improving value communication
Metrics to Track
Gross margin per customer
Price-to-value ratio (customer perception)
Win rate at different price points
Customer price sensitivity (churn after increases)
FAQ
How do I know if I'm undercharging?
If your close rate is above 80%, customers never push back on price, or you're working harder than competitors who charge more - you're likely underpriced. AI analysis of your margins and market rates confirms this.
What's the best way to raise prices?
Start with new customers, communicate value before price, offer grandfathering to loyal customers, and raise in smaller increments more frequently rather than large jumps rarely.
How much should I increase prices?
Test 10-20% increases first and measure response. If fewer than 10% of customers push back, you can likely go higher. AI can model the profit impact of different scenarios.
Related Reading
Next: browse the hub or explore AI Operations.