008: Unlocking the Power of Value-Based Pricing (Hint: It’s More Than Flat Rates)
Wednesday, September 4, 2013 – 1 hour, 14 minutes
Download: MP3 (70.8MB)
Special guest Matt Riopelle joins us to tackle the challenging issue of Value-Based Pricing and charging what you’re really worth. This simple-yet-freeing concept can help you break away from a purely effort-based compensation model that’s focused on hourly time, or fixed rates. We discuss tailoring your pricing structure to effectively match the value of the results that you’re providing to the client. This is a really big one, so hold onto your hats, it’s about to get real!
- 07:13 Fixed Rate Pricing isn’t necessarily Value-Based Pricing – Actually, in most cases it’s not.
- 10:49 The 3 factors that comprise Value-Based Pricing: Expenses, Time, and Value.
- 15:46 How would the client figure out what a project is worth to them?
- 18:57 Positioning yourself as an investment instead of an expense
- 21:55 Don’t focus on your needs, focus on the client’s needs. Your first question should not be “What’s your budget?”
- 27:49 Focus on project goals and price accordingly.
- 32:00 Delay setting price expectations until you’ve had preliminary project conversations.
- 33:52 Budgets are not set in stone.
- 36:23 Provide multiple options with tiered value. You can remove features and functionality to fit a budget, but your price should not be arbitrarily lowered to fit a budget.
- 42:27 How do you justify charging different people different amounts for the same thing?
- 50:18 If you are working in a firm where this approach is not used, is your environment is receptive to you enacting change? If not, is this the direction you want your career to be heading?
- 52:37 Value-Based Pricing only works if you are in control of your business and your work, and are willing to actively seek out responsibility.
- 54:22 Unprofessional work will never lead to professional work. Start practicing exercising client selectivity now, not later.
- 58:11 What we did wrong when we started doing Value-Based Pricing
- Our Guest: Matt Riopelle
- Get a free copy of Matt’s ebook
- September 10: Matt’s Workshop in Austin, TX
- Design Pro Article – Project Pricing With Respect To Value
- Design Pro Show No. 34 – Cost, Value, Price, and Profit
- Design Pro Show No. 24 – The Morality of Profit
- Design Professionalism (book) by Andy Rutledge
- Sean’s Article: Enabling Excellence through Selectivity
- Breaking the Time Barrier (book) by Mike McDerment
- Getting Naked: A Business Fable About Shedding The Three Fears That Sabotage Client Loyalty (book) by Patrick Lencioni