August 12, 2022

When is value pricing a bad idea?

Over the years, lots of people have asked me if there are any situations where value pricing is a bad fit.

My answer has always been something like:

“Technically, you CAN use value pricing in any situation but it’s not always worth the effort.”

This answer is true in theory, but it has always felt a bit unsatisfactory to me.

Today while doing a presentation to a group of UX folks, a more useful answer occurred to me, thanks to a smart question from one of the participants.

My new and improved answer is this:

“Value pricing doesn’t work when the client can’t say what they want the outcome of the project to be.”

For example...

If the prospective client is like, “I dunno why I want a UX person, I just do,” then there’s no way to value price the project.

Here’s the thing...

You can’t set a price based on the value of a client’s desired outcome if you don’t know what the desired outcome is.

How do you uncover the client’s desired outcome?

That’s what The Why Conversation is for.

Once you know their desired outcome, you can write a value priced proposal for the project.