Following on from our previous blog on navigating price increases let’s dive into the nitty-gritty of pricing strategies because, trust us, it’s a total game-changer!

In our work with agencies we’ve noticed start ups beginning with a time-based pricing strategy, probably brought over from their work in consulting. This is a smart move at the start – it’s simple, transparent and often aligns with the client’s mindset. However as the business becomes more established, agency owners often explore the idea of value-based pricing. 

Why? Well, as your work gets more intricate, this strategy lets you tailor your pricing to your client’s needs. It’s not just about time; it’s about showing the value you bring to the table. And that’s a game-changer, especially when you need to up your prices or tweak the project scope.

But what is value-based pricing? 

There are some key concepts associated with value-based pricing and understanding these will help you implement it in your business: 

• Understanding your clients perspective:

Get into your clients head – It’s important to fully understand what your client is looking for from the project; what are their objectives and goals? The more you understand, the better you can set your prices. 

• Measuring Value: 

Since a chunk of your pricing is based on the value you deliver, figure out how to measure it. Some ideas of KPIs could include the effect on revenue, cost savings, brand recognition or other outcomes your client is looking to improve. Show them what you can bring to the table.    

• Open Communication:

Be honest about how you’re coming up with those numbers and what they can expect in return. Transparency is critical to maintaining trust.

• Flexibility and adaptability:

Value-based pricing allows you to roll with the punches. If the project takes a turn, no biggie, adjust your pricing to match the new outlook.

A Win-Win strategy

Client’s love having an all-in price for the job, and you get room to adapt if the scope of the project changes. An additional benefit is that clients are more open to parting with cash and invest in top-notch services if they see real value.