Embracing Outcome-Based Pricing and Ditching Hourly Billing with Jonathan Stark

Embracing Outcome-Based Pricing and Ditching Hourly Billing with Jonathan Stark
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Summary:
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Jonathan Stark is a former software developer who is on a mission to rid the world of hourly billing. He is the author of Hourly Billing Is Nuts, the host of Ditching Hourly, and writes a daily newsletter on pricing for independent professionals.
In this episode, Jonathan highlights the drawbacks of billing hourly which can reduce your value to just a commodity. Instead, he suggests pricing your services based on the outcome you deliver, thereby providing maximum value to your clients.
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Why you have to check out today’s podcast:
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- Discover the top reasons behind the shift away from hourly billing
- Find out the advantages of choosing outcome-based pricing over hourly billing
- Uncover why positioning your service effectively can have a significant impact on your pricing strategy
"Positioning is critically important for any kind of upward lift on your fees."
- Jonathan Stark
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Topics Covered:
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01:04 - What got him into pricing
03:35 - The problem with having an hourly rate
06:11 - Pricing uncertainty in the case of a car diagnostic
08:45 - What makes it better charging fixed price upfront
10:33 - Why positioning your service is crucial in pricing
12:59 - What hourly rate appears to be on the label
16:15 - Touching on the 'Experience Economy' [pricing transformation]
19:06 - Formula for value or the maximum price
21:36 - The best reason to not use hourly prices
24:22 - Solving the scope problem with knowing the desired goal
29:21 - Jonathan’s pricing advice
30:38 - How to connect with Jonathan
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Key Takeaways:
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"If you sell somebody an hour, you cannot make it more efficient. It takes an hour to deliver it. It artificially limits your income." - Jonathan Stark
“The way I do it [on the scope problem], I don’t scope first, I scope last.” - Jonathan Stark
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People/Resources Mentioned:
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- Alan Weiss: alanweiss.com/...
- Joseph Pines: strategichoriz...
- How to Measure Anything: Finding the Value of Intangibles in Business by Douglas Hubbard: www.amazon.com...
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Connect with Jonathan Stark:
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- Website: jonathanstark....
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Connect with Mark Stiving:
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- Email: [e-mail]
- LinkedIn: / stiving
- Twitter: ma...
VISIT THE IMPACT PRICING PODCAST for Full Show Notes and Resources:
podcast.impactp...