Subscribe for updates and more.

Pricing

Planted 02022-01-22

The only way to determine how much someone will pay for something is to put it up for sale and see how many people actually buy it.

Pricing is personal.

Value informs price. Differentiators inform value perception.

Differentiators:

  • Specalization
    • ability specialization
    • behavior specialization
    • lifestyle specialization
    • mission specialization
    • product specialization
    • profession specialization
    • service specialization
    • style specialization
  • Influence
    • reciprocation
    • commitment & consistency
    • social proof
    • likability
    • authority
    • scarcity

Ways:

  • Hourly billing
  • Daily billing
  • Fixed pricing
  • Value-based pricing
  • Retainers

Hourly Billing

  • Additional hours incur payment surprises
  • Handles scope creep easily
  • Can be used as a foothold
  • Earning potential tied to unit of time, capped as there are only so many hours
  • Punishes server for efficiency gains, no incentive to do things efficiently
  • Brings paperwork and hour logging, an attention squeeze
  • If results are being delivered, does it matter how many hours and minutes are logged each day?

Fixed Pricing

  • No payment surprises, client and server know exactly how much money will trade hands
  • Potentially subject to scope creep
  • Server is rewarded for efficiency gains, incentive to do things efficiently
  • No attention squeeze

Retainers

  • Guaranteed work for client, guaranteed income for server
  • Allows day-to-day flexibility

Resources: