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How To Steer Your Pricing

A ship is, well, a ship. That’s all you need to know to judge whether you like a picture of a ship. It would however be very dangerous to try to captain a ship to get anywhere if you didn’t first learn to use the proper names for its parts and what you can (and cannot) do with them. Your price is the same.

Here are the essential parts of a price:Rate – How much, and of what kind: ($,€,£)?Basis – the unit of measure, like “per hour” or “per deliverable”. As long as you choose something the client sees as desirable and is also legal, easy to measure, and understand, it’s good.**

Granularity – the level of detail in scoping. The usual choices include broad-scope, phased milestones, or individual task levels. All have fans and detractors.Duration** – the time frame, delimited by either periods or result milestones.

And people

Billing Method – determines how you charge – as a flat fee upfront, milestone-based, retainer, time and materials, success fee, or any combination thereof.**

Incentives** – how your price reacts to “jumps” in client commitment – volume discounts, longer retainer adjustments, or similar reasons for a client to benefit you.

The more control you can achieve over how your service offers are structured and described, the less room there will be for the value you create to slip through your fingers and benefit your clients disproportionately more than it benefits you.

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