When the price is right, it really comes down to perceived value rather than expense. Sure, there typically is a budget. They typically have limited resources. They have to watch what they spend.
But for the smart buyer, they’re aiming for value. Getting more than what you paid.
As a consultant, a service provider, I get asked by a lot of other consultants/service providers about pricing.
My strategy is value-based pricing – meaning I talk to the prospective client about the vision of their business and the things that are preventing them from achieving that vision. That identifies the goal, the prize.
And at that point, I can ask “Would it be worth X for me to help you achieve that?” (Note: And when I can’t help them achieve their vision, I skip that sentence…I’m too old to dive into a situation that isn’t in my sweet spot.)
There might be some back and forth. And there are those situations where we shake hands and go our separate ways. But most times, this is the best pricing strategy I can use because it focuses on the value the client will receive rather than the expense, the hourly rate, the project budget.
And it’s always best to focus on the value, the rewards, the desired outcome because when all parties are focused on that, success is easier to achieve. But when the parties are focused on costs, expenses, budgets…the focus is placed on the wrong things and success becomes much more difficult to achieve for all.
What do you think? Would you rather focus on the value you will receive or the project cost or hourly rate?