August 9, 2024

Most people don’t understand value pricing

When they hear of it for the first time, lots of folks seem to think that value pricing is a scam designed to gouge clients out of all their money.

(Hilariously, these same people often argue that “hourly billing is the most fair and transparent” way to charge for their work, which is utterly asinine. But I digress... 🤦)

What non-practitioners don’t understand is that VALUE PRICING CUTS BOTH WAYS.

Value pricing is NOT a license to print money.

The core premise of value pricing is that you set your price at a FRACTION of what the outcome is worth to the client.

In other words...

If a client would have paid a maximum of $100k for your assistance, you would offer them price options starting as low as $10k.

That’s a TENTH of what it’s worth to them!

Is that gouging?

No.

No, it is not.

(Besides, “gouging” has a specific legal definition and isn’t even remotely possible to meet in the realm of professional services. But, again, I digress...)

So...

If you know someone who is - philosophically or ethically - against value pricing, I can say with certainty that they don’t understand it.

Yours,

—J