February 28, 2020
Ideal conditions for value pricing
Sent by Jonathan Stark on February 28th, 2020
Technically, you could value price anything, but in practice it probably makes sense to use it only in particular circumstances.
- A successful U.S coffee shop chain has a strategic directive from their CEO to expand into China. You are a U.S. expat living in Beijing who wrote the definitive book on Chinese coffee/tea culture. This is a GREAT FIT for a value priced engagement because you are the authority on the subject and they could be facing a potentially disastrous roll out. Literally billions in cash and brand equity could be lost on a botched expansion.
- A homeowner has a clogged toilet in his powder room. You are a local plumber. This is NOT A GREAT FIT for a value priced engagement because loads of people are qualified to unclog a toilet and the risk of disaster is very low.
Moral of the story:
The best time to use value pricing is when someone is facing a hugely risky undertaking that involves something that you are the go-to person for.