Demand and Supply Tension Pricing
Raise prices by making scarcity visible and positioning for the niche or luxury buyer
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 4
- Confidence
- 87%
Priestley says price is always a function of demand-and-supply tension: many people want something and some miss out. Crucially, transparency of that tension pushes prices up, so make the scarcity visible, a queue outside the club, a waiting list of 100 for 10 spots, '7,000 took the assessment, we can take 350,' Glastonbury announcing 1.2M pre-registered for 136,000 tickets. He then layers in audience segmentation: every audience splits into mass (price-shoppers), niche (value, passion, community), and luxury (pedigree, exclusivity). And the money is concentrated: 1% hold 15% of budget, 9% hold 45%, 90% hold only 40%, so the top 10% control 60%. Most businesses chase the low-budget mass market. The move is to pick an ICP that gets extraordinary value from you and become exclusive for that niche or luxury segment, which lets you charge dramatically more.
Origin
Daniel Priestley's pricing and positioning framework, illustrated on Modern Wisdom with Glastonbury and a billionaires-only couples therapist.
Core principles
- 01Price is a function of demand and supply tension, not a random markup
- 02Transparency of demand, visible scarcity, pushes prices up
- 03The top 10% of an audience holds 60% of the budget
- 04Becoming exclusive for a niche or luxury market lets you charge far more
How to run it
- 1
Engineer real scarcity
Cap supply against genuine demand: limited spots, drops, or client slots that create tension.
Watch out Only claim scarcity you can truthfully back; you should be able to screenshot the real numbers.
- 2
Make the tension transparent
Show the market that you're in demand via waiting lists, sign-up counts, visible queues, or pre-registration numbers.
Pro tip Tell people '7,000 applied, we can take 350' when it's genuinely true.
- 3
Segment mass, niche, luxury
Recognise the three audience tiers: mass wants low price, niche wants value and community, luxury wants pedigree and exclusivity.
Pro tip The top 10% of an audience holds 60% of the budget.
- 4
Pick a high-value ICP and go exclusive
Choose an ideal customer who gets extraordinary value from you and position yourself as exclusive for them.
Watch out Chasing the mass market means fighting over the 40% of budget held by 90% of people.
In the wild
Priestley cites Esther Perel as a couples therapist positioned exclusively for billionaires. A single 22-year-old sees zero value; a 52-year-old billionaire facing a divorce that could destroy 40M in capital sees enormous value in fixing the marriage. By becoming exclusive for that market, she can charge a quarter of a million per engagement and gets serious, dedicated clients.
→ Extreme value to a narrow high-budget ICP supports prices ordinary positioning could never command.
For 364 days a year you can't buy a Glastonbury ticket, only pre-register. They then announce 1.2 million pre-registered against 136,000 tickets going live at 5am. People set alarms to buy. The visible demand-supply tension does the price and urgency work.
→ Visible scarcity drives frenzied demand at full price.
Common mistakes
Random price increases
Bumping prices without first creating demand-supply tension has no foundation and feels arbitrary to buyers.
Chasing the mass market
Targeting the largest group ignores that 90% of people hold only 40% of the budget while the top 10% hold 60%.
Is it for you?
Best for
Service providers and creators uncomfortable raising prices who want a principled way to do it.
Not ideal for
Commodity businesses competing purely on price in a true mass market.
From the transcript
“price is always a factor of demand and supply tension... especially if there's any what's called transparency of demand and supply tension.”
“1% of people have 15% of the budget... 90% of the people have 40% of the budget. So the top 10% have 60%.”
From the episode
$0 To $1M: The New Rules For Building A Thriving Business - Daniel Priestley - #946
Daniel Priestley