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Value based pricing ppt -final-chattanooga

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Value based pricing ppt -final-chattanooga

  1. 1. Value-Based Pricing: Guide for Digital Agencies 4 Steps to Scoping for Higher Profits #DcCha @GeneHammett
  2. 2. Shifty & Slimy
  3. 3. Trusted Advisor Journal of Experimental Social Psychology Enclothied Cognition, Adam D. Galinsky and Hajo Adam
  4. 4. Relationships based on VALUE will last longer than relationships based on PRICE. “I love to use the lifetime value of clients’ processes with my prospects.” Melanie Romanaux, Somedia Solutions “We pride ourselves more on client relationships than the technology solutions we provide.” Randal Kent, Sevaa Group
  5. 5. Trading Time for Money
  6. 6. Traditional fixed fee pricing is hard to scope for PROFITS.
  7. 7. Focus on Features & Functions
  8. 8. Jumping to conclusions
  9. 9. Who Am I? @GeneHammett • Entrepreneur • Business Coach • My Focus
  10. 10. Value-based pricing is just charging more…
  11. 11. Performance-based pricing
  12. 12. Who likes retainers?
  13. 13. Value-based pricing starts in the MIND.
  14. 14. 4 Steps to Value-Based Pricing Gap Value Solution Offer Every step has VALUE to the prospect.
  15. 15. VBP Step 1: Gap Gap • • • • Now vs. Future Why? Client’s drivers? Pains, challenges, breakdowns, goals, aspirations Warning: Too many begin to focus on the SOLUTION. Value Solution Offer
  16. 16. VBP Step 2: Value Gap Value • • Lifetime value of the client Calculate the acquisition cost for new customers Warning: Without understanding the real VALUE of the project, you will likely only scope the “traditional” way. Solution Offer
  17. 17. Customer Lifetime Value Pardot Example: Revenue: $1000 per month per customer Avg. Length of Customer: 5 Years Acquisition Cost: $8000 per customer David Cummings, DrupalCamp Atlanta 2013
  18. 18. VBP Step 3: Solution Gap Value Solution Strategic and tactical • Optimal to build it together • Differentiation is the key Warning: It should be in alignment with the customer’s goal. • Offer
  19. 19. VBD Step 4: Offer Gap Value Solution Offer • • Compelling Combination of all previous steps Warning: Your offer has to be seen as UNIQUE either by your experience, the approach, or skills. “Aspirin vs. Vitamins”
  20. 20. 4 Steps to Value-Based Pricing Gap Value Solution Offer Every step has VALUE to the prospect.
  21. 21. #1 Way to Do VBP Qualify 25% 90% 90% Big Project
  22. 22. Fear is that it is too difficult
  23. 23. Fear is that it is too much like accounting
  24. 24. Change the Conversation “Even when we were a little firm, we would immediately change the conversation to talk about their business and what are their business problems… ” Aaron Shapiro, Co-founder of Huge, Inc.
  25. 25. Parting Thoughts • Scoping for Higher Projects is a process • Stop Undercharging • Look at COST of them not taking your offer • Communicate ROI • Differentiate • Confidence
  26. 26. Which do you want to be?
  27. 27. Questions
  28. 28. And Finally... Get slides. CoreElevation.com/value/ Ask me a question. askgene.me @GeneHammett

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