Day 25 of 28 · AI Challenge
Pricing Your AI Services
⏱ 6 min
📊 Beginner
Pricing is where most freelancers and side project builders leave money on the table. They guess. They look at what others charge and go a little lower. They price based on time instead of value.
Today you'll learn a better way — one that gets you paid what your work is actually worth.
The three pricing models (and which one makes you the most)
Hourly pricing — You charge for your time. $50/hour, $100/hour, whatever the market bears. This is the simplest model but it has a ceiling: there are only so many hours in a day, and clients always feel like the clock is ticking.
Project-based pricing — You charge a flat fee for a defined deliverable. $500 for a landing page. $1,500 for a brand strategy report. Clients love the predictability, and you love that working faster (thanks to AI) means a higher effective hourly rate.
Value-based pricing — You charge based on the outcome your work creates. If your email sequence generates $50,000 in revenue for a client, charging $3,000 is a bargain. This is where the real money lives.
Here's the progression most successful freelancers follow: start with project-based, move toward value-based as you build confidence and results.
Knowledge Check
Why does AI make project-based pricing more profitable than hourly pricing?
A
Because AI lets you complete projects faster, increasing your effective hourly rate without the client paying more
B
Because AI tools are expensive and you need to cover the cost
C
Because clients pay more for AI-generated work
D
Because hourly pricing is illegal for AI services
If a project pays $500 and it used to take 10 hours, that's $50/hour. With AI, the same project takes 3 hours — suddenly you're earning $167/hour. With project-based pricing, working faster benefits you. With hourly pricing, working faster actually earns you less.
The psychology of pricing tiers
Never offer just one price. Always offer three options. This is called the tiered pricing strategy, and it works because of how human brains make decisions.
Basic tier — The essentials. Stripped down, clearly limited. This exists to make the middle tier look like a great deal.
Standard tier — The one you actually want most people to buy. Most features, best value. This is your sweet spot.
Premium tier — Everything included, white-glove service, priority delivery. This exists for clients who always buy the best — and it makes your Standard tier look affordable by comparison.
Three tiers guide clients toward your sweet spot — the middle option. The premium tier anchors the price higher.
Example for a content writing service:
Starter — $497/month: 4 blog posts, basic SEO optimization, 5-day turnaround.
Growth — $997/month: 8 blog posts, full SEO optimization, social media repurposing, 3-day turnaround, monthly strategy call.
Scale — $1,997/month: 12 blog posts, full SEO, social media, email newsletter, 48-hour turnaround, weekly strategy calls, dedicated Slack channel.
Most clients pick Growth. That's exactly the plan.
Knowledge Check
In a three-tier pricing structure, what's the purpose of the Premium tier?
A
It's just there for decoration
B
To trick people into overpaying
C
It makes the Standard tier look like great value by comparison — and captures clients who always choose the best option
D
It's the one you want everyone to buy
The Premium tier serves two purposes. First, it creates an anchor — when someone sees a $1,997 option, the $997 option feels reasonable. Second, some clients genuinely want the premium experience and will pay for it. Either way, you win.
Help me create a tiered pricing structure. I offer AI-powered social media management for small restaurants. Right now I charge $500/month flat for everything and I feel like I'm undercharging. I create posts, write captions, handle scheduling, and do monthly analytics.
You're definitely undercharging. Let's fix that.
**Here's your new pricing:**
**🥉 Essentials — $697/month**
- 12 posts/month (3 per week)
- Captions and hashtag research
- Scheduling on 2 platforms
- Monthly performance snapshot (1-page PDF)
**🥈 Growth — $1,297/month** ⭐ Most Popular
- 20 posts/month (5 per week)
- Professional captions with brand voice
- Scheduling on 3 platforms
- Stories/Reels content planning (4/month)
- Monthly analytics report with recommendations
- Content calendar shared in advance for approval
- One round of revisions per post
**🥇 Premium — $2,197/month**
- 30 posts/month (daily)
- All Growth features
- 8 Stories/Reels per month
- Competitor monitoring
- Weekly performance updates
- Priority response (same-day revisions)
- Quarterly strategy session
**Why this works for restaurants:**
- Essentials: New restaurants just getting started on social
- Growth: Established restaurants wanting consistent, quality content
- Premium: Multi-location or high-end restaurants that need a serious presence
**Your expected revenue shift:**
- Before: 5 clients × $500 = $2,500/month
- After: 2 Essentials + 2 Growth + 1 Premium = $6,388/month
- Same number of clients, 2.5x the revenue
Want me to draft the proposal you'd send to existing clients explaining the new pricing?
Won't my existing clients be upset about the price increase?
Some might be, and that's okay. Here's how to handle it:
**For existing clients, use this script:**
"Hey [Name], I'm restructuring my services to provide even more value. Starting [date], I'm moving to tiered packages. As a valued existing client, I'm offering you a 60-day grace period at your current rate, plus a 15% loyalty discount on whichever new package you choose."
**What actually happens:**
- 70% of clients upgrade and stay (they were already getting value)
- 20% choose the lower tier (and you do less work for nearly the same money)
- 10% leave (and you replace them at higher rates)
**The math:** Even if you lose 1 client out of 5, your revenue increases significantly. And the clients who stay are now in a structured relationship with clear expectations.
You'll feel nervous. Do it anyway. Undercharging isn't doing your clients a favor — it's doing yourself a disservice.
↻ Replay conversation
How to research what the market actually pays
Don't guess your prices. Research them. Here's how AI can help:
Ask AI directly. "What do freelance social media managers charge small businesses in the US?" You'll get a ballpark range based on aggregated data from thousands of sources.
Search job boards. Look at what companies post on Upwork for similar services. The budget ranges tell you what buyers expect to pay.
Check competitor websites. Many services publish their pricing. If they don't, that usually means they're charging premium rates (because publishing prices would scare off tire-kickers).
Talk to potential clients. The most accurate pricing data comes from conversations. When you describe your service and someone says "that sounds reasonable" without flinching — you probably priced too low. When they say "let me think about it" — you're in the right range.
Knowledge Check
A potential client immediately says "yes" to your price without any hesitation. What does this most likely mean?
A
You probably priced too low — they expected to pay more for this type of service
B
You should raise your price for the next client but keep this one the same
C
You found the perfect price point
D
They're an ideal client who values your work
Instant yes with zero pushback usually means you left money on the table. The ideal response is a brief pause, maybe one clarifying question, then agreement. If everyone says yes immediately, raise your prices by 20–30% and see what happens.
Proposals that win
A great proposal does three things: it shows you understand the problem, presents a clear solution, and makes the investment feel obvious.
Here's a structure that works:
1. Their problem (in their words). Repeat back what they told you. This builds trust and shows you listened.
2. Your solution. What you'll deliver, how it works, and what they can expect.
3. The investment. Three tiers. Clear deliverables. No surprises.
4. Social proof. Testimonials, case studies, or results from similar clients.
5. Next steps. Make it dead simple. "Reply 'let's go' and I'll send the invoice to get started this week."
AI can draft this entire proposal in 5 minutes. You spend 10 minutes personalizing it. That's a 15-minute proposal that looks like it took hours.
Final Check
What's the most effective pricing strategy for someone starting out with AI-powered freelance services?
A
Use project-based pricing with three tiers, and raise your rates as you build a track record and testimonials
B
Charge hourly and track every minute
C
Offer the lowest price in the market to win clients
D
Copy exactly what competitors charge
Project-based pricing with tiers gives you room to grow. You earn more as AI makes you faster, clients get pricing clarity, and the tier structure naturally guides people toward your ideal package. As you collect results and testimonials, you shift toward value-based pricing and increase rates.
💎
Day 25 Complete
"Price based on value, not time. AI makes you faster — project-based pricing lets you keep the upside."
Tomorrow — Day 26
Building Your Portfolio
Tomorrow you'll build a portfolio that gets clients — even if you're just starting out.