June 19, 2021

But what about changes?

One of the most common questions I get when people are starting to think about value pricing client projects is this:

“But what about scope creep? Do I value price the change orders, too?”

In a value pricing model, there’s no such thing as a change order.

Why?

Because you’re not pricing the deliverables, you’re pricing the client’s desired business outcome.

For any project of a non-trivial duration, one thing you can be absolutely sure of is that there will be changes in the scope of work.

And that’s fine, because value pricing takes this into consideration at the proposal stage.

In a value pricing model, you don’t base your price on the scope of work (i.e., your time and materials).

You base your price on the client’s desired business outcome.

And guess what?

The client’s desired business outcome will virtually never change during the course of a project.

If halfway through the project, the client comes up with a tactical change that will get to the desired outcome more quickly, then you will want to do it for free because it will get you to the finish line faster.

Here’s the thing...

If you’re worried about scope creep, you haven’t got your head around value pricing yet.

Specifically, you probably haven’t internalized the concept of pricing - and delivering - desirable business outcomes.

And that’s fine!

It took me years to transition to a pure value pricing mindset.

It isn’t the kind of thing that happens overnight - but it is worth pursuing.

Yours,

—J

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