Adding Value: Creative Approaches to Pricing and Positioning


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This talk, given by David Gillis (@davegillis) and Ben Weeks (@ben_weeks) at FITC: Spotlight Freelance 2013, was all about practical advice for understanding and accounting for the value you add to your clients’ businesses—and pricing accordingly.

Published in: Business, Technology

Adding Value: Creative Approaches to Pricing and Positioning

  1. 1. Adding Value Creative approaches to Pricing and Positioning Dave Gillis ⊕ Ben Weeks
  2. 2. Pricing is scary
  3. 3. Pricing is a process 1. Positioning 2. Qualification & Diagnosis 3. Negotiation
  4. 4. 1. Positioning
  5. 5. How many known, suitable alternatives are there?
  6. 6. Pricing Power Reputation Specialization
  7. 7. Tune in. What are you interested in? What are you good at that is valuable to others? In your arena, who are your competitors? How many known, alternative competitors are there? Where does your target audience hang out? Go and experience, observe, listen to them, doing so builds awareness both ways. (Where are their pain points? Competition etc? What do they think and feel about you?) What would you like them to feel and think?
  8. 8. Reputation (You can never have enough.)
  9. 9. Thinking Behaviour Performance
  10. 10. Experts write. Thinking ~ Blair Enns
  11. 11. Engage with your audience. Behaviour
  12. 12. You get more of the kind of work you do. Performance
  13. 13. Pricing Power Reputation Specialization
  14. 14. Qualification & Diagnosis
  15. 15. Minimum Level of Engagement
  16. 16. Is there an allocated budget?” Do you have a sense of how much you will need to invest to accomplish this?” Why are you going to market now?” “ “ “
  17. 17. Don’t take self-diagnosis at face value.
  18. 18. Known Solution Unknown Solution Known Problem Unknown Problem N/A Address known issues Unlock new opportunities Execute roadmap
  19. 19. Light-weight diagnostic tools • Pilot Project • Client Questionnaire • Discovery Session • Moodboards • Street Interview Video
  20. 20. Value-based pricing...
  21. 21. Value is created outside of your business.
  22. 22. Are you being hired to be efficient or effective? ~ Tim Williams
  23. 23. Look for leading indicators of success.
  24. 24. Scope of work Scope of value: “I will work with client to deliver the following outcomes...”
  25. 25. Factors to consider when setting a value-based price • Where am I delivering on the customer’s value chain? • How important is this to the strategic objectives of the customer? • What is the financial impact of the desired outcomes? • What is the client’s cost of not solving this problem? • How time-sensitive is this assignment? • How sophisticated is the client? • To what degree am I uniquely qualified for this assignment?
  26. 26. Types of Value-Pricing Type Purpose Form Tiered-based Dimensionalize value Multiple fixed-bids Commitment-based Define engagement timeline + minimum acceptable solution Single fixed-bid Usage-based Prescribe application License agreement Performance-based Align incentives Base fee + value reserve tied to KPI Partnership Align incentives Base fee + equity ... ... ...
  27. 27. Negotiation
  28. 28. The polite battle for control • Assume the role of the respectful facilitator • Your job is not to convince but to affirm and assert. • Discuss to build an honest assessment of fit. • Be willing to part ways, it's all about fit. ~ Blair Enns
  29. 29. The polite battle for control • When it comes to money, shift gears from being inspiring, slow down. • Discounts: Don’t. If you must, leave it till the end, put it in writing. • Proposals are: "The words coming out of my mouth." • "I'd be happy to write up a contract for your signature • if you're telling me you'd like to hire us." ~ Blair Enns
  30. 30. In conclusion...
  31. 31. Quick recap • Pricing is a process that involves positioning, qualification and diagnosis, and negotiation • Positioning is where your pricing power comes from. Think: specialization and reputation. • Use an minimum level of engagement to qualify by price as early as appropriate. • Don’t accept clients’ self-diagnosis. • Look for creative ways to price your work based on its value. • Negotiate by taking on the role of the respectful facilitator.
  32. 32. Thank you! @ben_weeks @davegillis