Captain’s log, stardate 20220518
Fellow list member Nick wrote in to share his success with value pricing (shared with permission, name changed by request):
Hope you are doing well.
Even before I knew about you, I was a strong believer that “hourly billing is nuts”. But you have introduced me to a new pricing strategy - value pricing. Previously, I was pricing the projects based on how much time it will take me.
So far, I have value-priced 3 projects and they have all been accepted by the clients without any questions. I based my price on the problem that I am solving and the “value” that I will provide with my solution instead of the time it will take me to do it.
If I would have gone with my traditional pricing method i.e. fixed cost, I would have done it at a lesser amount.
So, thank you!
It takes practice to fully internalize the idea of value pricing, but once you do, it’s virtually impossible to NOT increase your profitability.
Why does it take practice?
Because you have to flip your mindset 180 degrees:
Don’t scope first.