Sent by Jonathan Stark on December 21st, 2018
A pre-condition for value pricing is to first understand what specific business outcome your client desires. Without that, there’s nothing to price.
So let’s say that in your initial meeting that you successfully uncover the client’s underlying goal for your engagement. You then quote them a price based on the value of the outcome. They accept and pay, and you get to work. Yay, money!
What happens if six months (and 1000 hours) later you’re no closer to reaching the goal? Do you give the money back? Do you keep working indefinitely toward the goal? Do you try to split the difference? Boo, stress!
This a tough situation that raises several considerations. I’m going to spend the next few days exploring each. For example: