December 22, 2016
The difference between menu pricing and productized services
If you are scratching your head about productized services, the thread below between reader Tom and me might help clarify things for you.
(Shared with permission)
Tom:
Is “menu” pricing (samples below) equivalent to a productized service?
Presentations
- standard ($75/slide)
- keynote level ($125/slide)
- templates ($500)
Layout
- datasheets ($125/page)
- case studies ($125/page)
- white papers ($50/page)
- graphic-heavy ebooks ($150/page)
- user manuals ($75/page)
- brochures ($100/page)
Jonathan:
Yes and no. Your list of offerings is better than doing work by the hour, but they are 100% focused on tasks and deliverables. You could increase your pricing by bundling some of your items together and selling the business outcome of your work. For example, rather than pricing presentations based on the number of slides, sell them based on the business outcome that professionally designed slides will deliver.
Tom:
That’s helpful, thanks. It still leads me to my conundrum of how to determine the value of discrete graphic design work for a large corporation. This is my primary challenge.
Jonathan:
The answer is simple:
Ask your clients.
To use your presentation services as an example:
- “Why would you pay me to design these slides when you could do it yourself?”
- “Why would you pay me to design these slides when you could have your in-house team do it?”
- “Why would you pay me to design these slides when you could get someone on fiverr for a fraction of my price?”
They’ll tell you what the value is to them.
Tom:
Thanks Jonathan — that’s good advice. But that will never lead to a $$$ amount, but perhaps it doesn’t need to?
Jonathan:
If you ask "Why? enough times, it will get you into the ballpark.
Client: “I’d like you to design a presentation for me.”
Tom: “Why not do it yourself?”
Client: “It’s an important presentation.”
Tom: “Why is it important?”
Client: “My boss is going to be there.”
Tom: “Why do you care if you boss is there?”
Client: “I’m up for a promotion.”
Tom: “Why do you want a promotion?”
Client: “I’ll get a big raise.”
Tom: (ah ha!)
I’m oversimplifying to make the point, but in a business context you can usually find an outcome that has dollars attached to it.
In terms of tone, you want to ask these questions the way you would talk to a friend over drinks. It’s a conversation, not an interrogation.
Yours,
—J