Video summary

How Much Should You Charge for Web Design? (One Rule, Five Formulas)

Main summary

Key takeaways

Business

Core business idea: simpler value-based pricing for web design

The speaker argues most agencies overcomplicate pricing with irrelevant inputs (pricing models, market rates, and self-imposed “minimum engagement”).

The central “one rule” for pricing

Price = (Client’s business “win” from the work) ÷ 10

This is interpreted as the “one slice rule”:

  • The client keeps ~90% of the value
  • The agency takes ~10%

What to ignore (to simplify pricing)

Pricing models

Hourly vs fixed, retainers, subscriptions, loss leaders—none are necessary for this approach.

Market/industry rates

Only relevant if you’re specifically competing against a rival.

Minimum level of engagement

Often prevents offering profitable low-tier options that keep deals alive.

Pricing frameworks / playbooks introduced

Value-based pricing rule

  • Client Win / 10 = Your Fee

“Price the moment” (not the client, not the service)

The same deliverable (e.g., a website) can be worth wildly different amounts depending on the company stage and timing:

  • Stealth → launch moment (high impact)
  • Post–Series B with traction (less urgent)
  • Pre-IPO moment (high scrutiny/high stakes)

Value options table

Build a table with multiple value drivers, each quantified with the client’s numbers and a confidence multiplier.

  • Show only 3 options in the proposal (not 10–100)

Selection of proposal options: “Papa Bear pricing”

Compared to “Goldilocks pricing” (decoy manipulation), the approach uses:

  • 3 real, credible options, each:
    • Exciting
    • Valuable to the client
    • Profitable for the agency

If any option fails one of these three criteria, it doesn’t go into the proposal.

Where each option’s price should land

  • Option 1 (top/aspirational): priced like the “best possible win”
  • Option 2 (budget-aligned): around what the client can spend
  • Option 3 (lower “out” option): below budget to prevent losing the client due to sticker shock

Concrete example / case study: “Ridgeline” functional beverage brand

Same service (new website) + same moment, but different value hypotheses lead to very different pricing.

Option 1: Increase average order value

Inputs

  • Orders/year: 80,000
  • Added value/order: $8
  • Website lifespan: 3 years
  • Confidence multiplier: 50%

Calculated client win

  • 80,000 × $8 × 3 × 50% = $960,000

Fee using “one slice rule”

  • $960,000 ÷ 10 = $96,000

Key tactic emphasized

  • Keep the numbers tied to the client’s assumptions (orders, pricing, timeline).
  • If challenged, your response is essentially: “Adjusting their own assumptions,” not defending your hourly math.

Option 2: Increase conversion (more visitors → customers)

Example result:

  • Client win: $360,000
  • Fee: $36,000

Option 3: Save team time

Example result:

  • Client win: $120,000
  • Fee: $12,000

Value range illustrates the strategy

  • Same deliverable, but about a 30x spread between outcomes:
    • $36k to $96k to $12k fees depending on the chosen value driver

Additional example value drivers mentioned (other moments/use cases)

  • Increase business valuation
    • Via valuation multiple / mix of owned vs paid channels
    • Example win: $1.5M
  • Save support money
    • Fewer confused customers → fewer support tickets
    • Example win: $54k

Actionable implementation steps (how to use the system)

  1. Find the “moment”
    • Identify the business decision/stakes (launch, fundraising, IPO, etc.).
  2. Identify value drivers
    • The website isn’t valuable by itself—price what it unlocks (AOV, conversion, valuation, time saved, support cost reduction).
  3. Quantify with a formula + confidence
    • Use the client’s operational numbers.
    • Add a confidence multiplier to reflect uncertainty honestly.
  4. Build a value table (many options)
    • Create 10–20–100 value-value formulas to generate creativity and accuracy.
  5. Present only 3 options
    • Don’t automatically show the three highest prices.
    • Use “Papa Bear” logic: each option must be credible and profitable, not a decoy.
  6. Name the options to anchor perception
    • Avoid generic labels like “Large/Medium/Small.”
    • Use client-relevant names. Examples:
      • Ridgeline: “case,” “six-pack,” “sip”
      • BMW: “7 Series,” “5 Series,” “3 Series”
      • United Airlines: “Polaris,” “Premium Plus,” “Economy Plus”
    • Goal: make abstract pricing feel concrete via familiar reference points.

Metrics / KPIs and targets highlighted

Pricing targets are expressed as percent-of-win, with examples:

  • Agency fee target: 10% of client win
  • Client keeps 90%

In the Ridgeline scenario, examples include:

  • Orders/year (e.g., 80,000)
  • Average order value uplift (e.g., +$8/order)
  • Conversion uplift, expressed via the resulting $360k win
  • Time saved, expressed via the $120k win over 3 years
  • Support tickets cost reduction, expressed via $54k win

No explicit revenue-growth or CAC/LTV/churn targets are stated beyond these constructed value computations.

Strategy implication: why “pricing a service” fails

Charging a flat amount for “a website” can cause mismatches:

  • If the website boosts valuation, underpricing can cost the agency revenue.
  • If the website mainly saves support costs, overpricing can hurt client ROI and lose the deal.

Therefore: price the value outcome rather than the deliverable.

Business resources mentioned

  • A free resource: “Six-figure pricing teardowns”
    • Includes 5 pricing formulas (including the Ridgeline-style approach)
    • Additional formulas for:
      • brand identity projects
      • marketing campaigns
      • pitch deck projects
    • Claims 24 ways to quantify value and ongoing updates

Presenters / sources

  • Presenter: an unnamed agency owner/speaker (the video uses “I” throughout; no name provided in the subtitles).

Original video