Manage episode 296890981 series 2443986
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Value pricing is best for discreet projects with a beginning, middle and end, whose value is greater than $100K to the client, and therefore priced starting at $10K.
If less than the above, consider simply flat-rating the service.
Menu pricing is well-suited for shifting to Advisory Services. You can offer bronze, silver, and gold level options, with varying price-spreads. See Pricing Curves, below.
FLAT RATE AND FIXED FEE
Perfect for services and deliverables to do all the time, so you have a handle on approximate scope. Assess how long a certain service takes on average, then double that amount of time and place your fee there. Get used to the feel of divorcing time and money, and you will most certainly get faster at what you do.
If there is wide variation in services you offer and the types of clients you offer them for, then group your clients and those services into segments. Then price each different segment as needed.
Not your old-school lawyer-style retainer, advisory retainer is well-suited once a value-priced project is complete. Unforeseen challenges and questions are likely to pop up, and having access to your smarts can be immensely valuable. Good for a predetermined but finite amount of time.
Proceed with caution, as the risk with contingency is perverse incentives. However, when done properly, both parties can benefit from the low risk on the buyer's side at the time of purchase, with the reward for the seller at the time of success.
Might as Well pricing drives the buyer to the most expensive option, because with the curve at 1x, 1.5x, and 1.75x, the buyer “Might as Well” buy the most expensive option.
Goldilocks pricing drives the buyer to the middle option, because the curve of 1x, 2.2x, and 5x drives the buyer to the middle option, because just like Goldilocks, it’s “just right, in the middle.”
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