Pricing Strategy Psychology Business

The Architect's Pricing: How to Sell Digital Air for Gold

By Mahfod December 24, 2024 6 min read

The Architect’s Pricing: How to Sell Digital Air for Gold

In the old world, price depended on production cost.

  • It costs you €10 to make → You sell for €30
  • €20 margin
  • Simple logic

In the world of AES (Autonomous Economic System), this logic collapses.

Production cost is close to zero.

AI generates an article for a few cents. A course duplicates infinitely at no marginal cost. Software serves 1 or 10,000 clients for the same hosting price.

So, how do you set your price?

The Architect practices Value-Based Pricing — and this is the secret to 99% margins.


The Three Pricing Philosophies

Philosophy 1: Cost-Plus (Price by Costs)

Formula: Price = Cost + Desired Margin

Example:

  • Production cost: €10
  • Desired margin: 100%
  • Selling price: €20

Problem in digital:

  • Production cost: €0.10
  • Desired margin: 100%
  • Selling price: €0.20

That makes no sense. You can’t base your price on a near-zero cost.

Philosophy 2: Competition-Based (Price by Competition)

Formula: Price = Competitors’ Price (± adjustment)

Example:

  • Competitors sell for €50
  • You sell for €45 (to be competitive)
  • Or €55 (to appear premium)

Problem:

  • Race to the bottom (everyone lowers)
  • No differentiation
  • Compressed margins
  • You let others define your value

Philosophy 3: Value-Based (Price by Value)

Formula: Price = Perceived Value to Customer × Coefficient

Example:

  • Your system makes the customer earn €10,000/year
  • Perceived value: €10,000
  • Coefficient: 10% (customer keeps 90% of the value)
  • Price: €1,000

Advantage:

  • High margins
  • Differentiation by value
  • Alignment with customer success
  • Independence from competitors

Value-Based Pricing in Practice

Step 1: Identify the Transformation

What does your product/service transform for the customer?

Questions to ask:

  • Before using my product, what situation is the customer in?
  • After, what situation are they in?
  • What’s the measurable difference?

Examples:

  • SEO training: Before = 0 traffic. After = 10,000 visitors/month.
  • Automation tool: Before = 20h of work/week. After = 2h.
  • Sales template: Before = 1% conversion. After = 5%.

Step 2: Quantify the Value

Put a number on this transformation.

Traffic: 10,000 visitors × 2% conversion × €50 average cart = €10,000/month in potential revenue

Time: 18h saved × €50/h (value of time) = €900/month in value

Conversion: +4% conversion × 100 sales/month × €50 margin = €200/month in additional profit

Step 3: Apply a Coefficient

The customer must keep most of the value — otherwise they won’t buy.

Typical coefficients:

  • General public digital products: 5-10% of value
  • B2C training: 10-20% of value
  • B2B services: 20-30% of value
  • High-ticket consulting: 30-50% of value

Example:

  • Value created: €10,000/month
  • Coefficient: 10%
  • Price: €1,000

The customer pays €1,000 to earn €10,000. It’s an obvious deal.


The Psychology of Pricing

Beyond rational calculation, price has a psychological dimension.

Price as Quality Signal

A low price says: “It’s not very good, but it’s cheap.”

A high price says: “It’s excellent, that’s why it costs this much.”

Paradox: Some products sell BETTER when you increase the price.

The customer associates high price = superior quality.

Price as Filter

A low price attracts:

  • Customers with few means
  • Customers who don’t value their time
  • Customers who complain a lot
  • Customers who don’t implement

A high price attracts:

  • Customers with means
  • Customers who value quality
  • Serious and engaged customers
  • Customers who get results (because they invest themselves)

Price is a filter. Choose who you want to filter.

Psychological Anchors

The human brain evaluates prices by comparison.

Technique 1: The High Anchor Present the most expensive option first.

  • Platinum Option: €5,000
  • Gold Option: €2,000
  • Silver Option: €500

The customer compares. €2,000 seems “reasonable” compared to €5,000.

Technique 2: External Comparison Compare to more expensive alternatives.

“A consultant would charge €10,000 to do this. This system does it for €1,000.”

Technique 3: The Cost of Inaction Show what it costs NOT to buy.

“Every month without this system, you lose €2,000 in potential revenue.”


The Architect’s Pricing Models

Model 1: One-Shot (Single Payment)

Structure: Pay once, lifetime access.

Advantages:

  • Simple to understand
  • Immediate cash flow
  • No subscription management

Disadvantages:

  • Non-recurring revenue
  • Constant sales pressure
  • Lower valuation (for resale)

Ideal for: Templates, short courses, simple tools.

Model 2: Subscription (Recurring)

Structure: Pay €X/month for continuous access.

Advantages:

  • Predictable revenue
  • Long-term relationship
  • High valuation (for resale)

Disadvantages:

  • Churn to manage
  • Continuous value to deliver
  • Higher entry barrier

Ideal for: SaaS, communities, ongoing services.

Model 3: Hybrid

Structure: Initial payment + subscription.

Example: €500 setup + €50/month.

Advantages:

  • Initial cash flow
  • Recurring revenue afterward
  • Customer commitment

Ideal for: Complex systems, coaching, B2B services.

Model 4: Revenue Share

Structure: You take a % of generated revenue.

Advantages:

  • Total alignment with customer
  • No risk for customer
  • High earning potential

Disadvantages:

  • Tracking complexity
  • Dependence on customer success
  • Trust necessary

Ideal for: Strategic partnerships, high-potential clients.


Pricing Mistakes to Avoid

Mistake 1: Undervaluing Out of Fear

“I don’t dare ask for this price, people will find it too expensive.”

That’s your fear talking, not market reality.

Test. You’ll often be surprised.

Mistake 2: Comparing to Low-Cost Competitors

There will always be someone cheaper.

Don’t play that game. Differentiate by value.

Mistake 3: Forgetting the Customer’s Hidden Costs

Your price isn’t the only cost for the customer:

  • Learning time
  • Opportunity cost
  • Risk of failure

Take these factors into account in your positioning.

Mistake 4: Single Price for Everyone

Different customers have different payment abilities and different needs.

Offer options (tiers) to capture different segments.

Mistake 5: Never Increasing

Your prices should increase with:

  • Your experience
  • Your proven results
  • Added value
  • Inflation

Increase regularly. Old customers keep their price. New ones pay more.


The Premium Pricing Mindset

You’re Not Selling Your Costs

Repeat after me:

“The customer doesn’t care what it costs me to produce.”

They pay for value received, not for your expenses.

You’re Selling a Transformation

You’re not selling:

  • A PDF
  • An access
  • Hours

You’re selling:

  • More revenue
  • More free time
  • Less stress
  • A problem solved

High Margin Is Ethical

A 90% margin isn’t “stealing” from the customer.

It’s giving them 10x the value of what they pay.

If your €100 product makes them earn €1,000, your margin is deserved.


Conclusion

In the digital world, production cost is near zero.

Basing your prices on costs is a fatal mistake.

The Architect practices Value-Based Pricing:

  1. Identify the transformation
  2. Quantify the value in euros
  3. Apply a coefficient (10-30%)
  4. Communicate the value, not the price

The result: 90%+ margins, satisfied customers, and a sustainable business.

Don’t sell your costs.

Sell the transformation.

That’s the secret to gold prices for digital air.