How to Value Price Your Creative Services Versus the Cost to Deliver
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- Опубликовано: 20 окт 2024
- In this episode of Ask Me Anything, Blair reveals how to implement value based pricing for more complex scopes of work where you might not know your actual costs to deliver.
You'll also learn how one agency was able to double and then triple their fees in their journey away from cost based pricing and towards value based pricing.
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TIME STAMPS
01:28 How can I value price when the scope of work is unclear?
02:57 Step 1 : Understand that raising the price of a standard service over time is not quite Value Based Pricing
04:02 Step 2 : Understand that value based pricing isn't about cost, it's about value
06:58 When you can't quantify costs, price based on the value to be created, then look at cost.
I'm a bit offended cause I can't like any of these videos. So much value. Thank you!
Love these vids! Just a note, the logo intro audio is way loud compared to the rest of the mix.
Thanks for letting us know :)
@@WinWithoutPitching I’m an audio engineer I can help.
I'm excited to receive my book and I'm sure this is answered within it, but I'll ask anyway because I have two proposals in the works. We work in comms (government, etc.), not marketing, and so how can the value of work be determined if there are no sales for the client to create value with?
Hi Dani. There's always something to measure. Maybe it's increased awareness or the end client using language that demonstrates affinity for the brand. That may require collecting a baseline of information to measure against.
Million dollar question for you Blair… Is there a minimum margin you would say is acceptable for value based pricing? Let’s say charging no less than 3x your cost? In your scenario in this video a $5m rev project with worst case cost being $3.5m seems like really low margin.
Start with 20%. But remember to experiment. No one client is the same.
Hello Mr Enns,
Some background info: im an architect who's working on launching a 3D visualization service. What i want to say is at first i was very impressed with the idea of approaching the client with the "value" i could provide him, as well as the idea of thinking outside the box in providing that value and branching out and zooming out in the process. And i thank you for that insight. However, when you speak about asking for a percentage of a client's revenue/profits like that, i think it is not ethical or fair and I'll try to explain why. For example, when my client gets that 30 million you mentioned or any other number (after i provide my services), it's not because of me (the service provider), it's because of that client's whole package in the market (his previous services/products, reputation, quality of work, etc), so my work as a 3D artist/visualizer, for example, may be to "help" him sell something using this specific service i just did, but i dont think i have the right for part of the returns he gets since, A- his revenue is due to many many other factors, and B- i only should take in return for my effort, and not simply try to take "as much as i can", so what i find logically "fair" is pricing based on what something would cost me to do plus some profit for my efforts, and not to try to take away from my client's revenue as much as i could (as you seem to state), whereas that revenue is due to many other factors and I'd be over-valuing my effort and input in that process, since i value based on logic and numbers not emotion (emotion lets you say my effort is worth a million while its not)
let me put your concern in a real world scenario. Apple doesn't give a damn about how you get the money to buy their product. they think it can bring their customers the status and the value in simplicity of use. So they will pay for it!
In Buisness you are there to make money and have a roof over(yourself).
Now, if you think in the entire video which you create for him/her your input is only 5% then feel free to charge 5% of his entire revenue from the video.
but the whole thing is it's hard to establish the future revenue. In all examples, people say "let's say 30M". Easy to say, but HOW do you establish the revenue??@@zahoorshah2824
Value based pricing is a truly moronic approach. In an instant bidding world, the price/quality equation is NOT determined by value creation....it's determined by competition. If you use this guy's logic, Bill Gates would pay $100 Million dollars for his Porsche because the proportion of enjoyment he derives from it relative to his net worth is worth the $100 Million expense to him. Bullshit!