Hi there -
Here is this week’s “1 principle, 2 strategies, and 3 actionable tactics” for running lean…
1 Universal Principle
"Contrast Creates Value."
Many product-oriented founders (myself included) have historically dreaded the pricing conversation. We love discussing our product features and benefits, but when it comes time to discuss its cost, we get nervous, avoid it, or, worse, underprice our value.
Then I discovered that founder-led sales can actually be the highest-converting type of sales when done right.
That led to a year-long journey of studying every sales strategy and tactic on the subject. I eventually gathered my learnings into a simple and cohesive framework that I’ll outline below.
2 Underlying Strategies at Play
I. Establish pricing anchors before discussing actual numbers.
I used to assume that prospects were sophisticated and would correctly see the value of my product. But why did they remain silent when I discussed pricing?
That's when I realized that it was because I had nothing to bridge my transition from my product demo to pricing, so it felt awkward and out of place to both me and the prospect.
The best place to start building this bridge isn’t during the demo, but in the first few minutes of your product pitch.
II. Contrast creates value.
All sales conversations are switching stories. You’re trying to get the prospect to switch from their current old way of doing a job to your new way.
As a side note, if they currently don’t have an old way of doing the job, they’re not a potential customer. Don’t waste your time pitching them.
The mistake I used to make was not talking at all or talking enough about their old way. However, the prospect was always making a comparison in their head that I had little influence over.
The key is explicitly identifying their old way, breaking it, and showing how your product is better. Doing this follows a natural narrative arc:
- Act 1 - Confrontation (Identify and break their old way)
- Act 2 - Resolution (Demo your better new way)
- Act 3 - Call to Action (Ask for the switch)
This is also where you plant your pricing anchors along the way. Let’s see how.
3 Actionable Tactics
I. Act 1 - Confrontation: Identify and break their old way.
This is where you break their old way, establish an existing alternative anchor, and create an opening for your new way.
More specifically, your goal is to:
- Identify what existing alternative they currently use
- Uncover what business problem they're struggling with
- Quantify the negative impacts in monetary terms (pricing anchor #1 - cost of old way)
Then, suggest underlying root causes of their current approach that are preventing better outcomes and tease the possibility of a better new approach.
II. Act 2 - Resolution: Demo your better new way.
This is where you demonstrate how your solution solves their root problems exactly and helps them achieve better outcomes.
Your demo is not a place to train your customer or impress them with the breadth of your product, but it should directly address the problems discussed in Act 1:
- Show how your solution solves their specific root problems
- Demonstrate how they'll avoid the negative impact of the old way
- Illustrate how they'll achieve the desired outcome with your solution (pricing anchor #2 - value of new way)
III. Act 3 - Call to Action: Ask for the switch.
This is where you connect their problems, your solution, and your pricing in a rational framework. When done well, this creates an offer they can't refuse (a mafia offer).
When sharing your pricing model:
- Recap their old way and its costs (existing alternative anchor)
- Restate how your solution helps achieve better outcomes (value anchor)
- Position your price point as a fraction of the value delivered
Now, I need to add this important disclaimer:
Your success with this framework is directly proportional to correctly identifying the right old way.
Too many founders think they are competing against other startups, but their true competition is usually a very different alternative. If you don't correctly identify your true competition, this framework will land flat
In my Business Model Design course, I walk you through correctly identifying your true competition, crafting a better solution that will cause a switch, and sharing pitch scripts you can use to start testing your switching story. If you want to start positioning your product to cause a switch, consider checking out The Business Model Design (BMD) Challenge.
That's all for today.
Ash
Author of Running Lean and creator of Lean Canvas
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P.S.
If you’d like to see these steps illustrated with an example, check out this week’s YouTube video:
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P.P.S.
Whenever you're ready, there are 2 ways I can help you:
1 - Get my Just Start course: If you're new to this framework, you'll learn the key mindsets for building the next generation of products that matter.
2 - Take the 30-day Business Model Design Challenge: If you're an aspiring or early-stage founder looking to launch a new idea in 2025, join my next Business Model Design Challenge, where you'll learn how to design and stress-test your idea without wasting resources.
