Sent by Jonathan Stark on April 15th, 2017
By some strange coincidence, several people have recently asked me some variation of this question:
“Can research projects be value priced?”
Yes, research projects can be value priced as long as you have direct access to the true buyer.
Which begs the question:
“How do you define the value of a research project?”
The same way you uncover the value of any project: you have a Why Conversation with the true buyer.
In other words, you start by essentially asking the true buyer:
“Why not just skip doing research?”
What Is Research For?
Think about research for a second... what is research for?
Research is a shortcut to increasing your knowledge.
And why would a business want to quickly increase their knowledge?
In order to make decisions more quickly and with less risk.
If you want to value price a research project, you need to find out what decision needs to be made based on the output of your work, and how important that decision is to the true buyer.
If the decision is not that big a deal, the client will not consider the research project very valuable. Therefore, you can’t set your price very high even if the research project would be a huge amount of work for you.
If the decision IS a big a deal, the client WILL consider the research project very valuable. Therefore, you can set your price quite high even if the research project would be a small amount of work for you.
Now I have a question for you researchers in the room:
What kind of businesses often need to make big, risky decisions that would stand to benefit from the kind of research you provide?
P.S. Need help breaking the chains of hourly billing? We should talk.