Regarding value-pricing, please read the second half of this and I’d love to hear your opinion on how to overcome some of those value-based pricing challenges.
Further to that, one thing I’ve been considering is how value pricing looks in comparison to hourly pricing, if all other things are equal (both parties present awesome outcome-based proposals). For most people, the point of value-based pricing is to find ways to justify a higher price than they would charge if they were billing for their time alone. This overcomes the ceiling of earnings you can have when trading time for money. So in most cases, a value-based quote will be higher than an time-based quote. As a client, if I see those two quotes, and both people back up their price with descriptions of the kind of outcomes they’ll create and how much value they will add to my business — why would I choose the higher value based option?
It’s easy to justify value-based pricing by saying it’s all in how you frame the discussion around value offered rather than time supplied. But a lot of people who charge hourly (myself included) already speak to clients in those terms. So there’s nothing new or special about value-based pricing from a clients perspective, except for a higher price tag.
What am I missing? I genuinely want to start using more value-based pricing, but I struggle with how to transition my potential client’s thinking along those lines.