What is value-based pricing?

If you think back to our three gardeners, earlier this week, the third one had the most compelling pitch for winning the work.

Gardener number one just gave an hourly rate. No idea how much it would be each month or what you would get for that.

Gardener number two explained what the cost would be most months "to keep things tidy", but left some variability open, if I decided that I wanted some changes making.

Gardener number three basically said "look, you've said you're not really interested in gardens, you just want somewhere nice. I'm the expert here, leave it to me, I'll look after everything for you, so you don't even need to think about it".

Gardener number three wasn't selling the benefits of their service. They were selling value.

Normally value is calculated as a price, but in this case, it's the removal of a worry. A weight off your mind. "Just leave it to the expert".

And that's why number three made such a compelling pitch. And why number three can charge so much more.

Take action What value does your product or service give?

Rahoul Baruah

Rahoul Baruah

Rubyist since 1.8.6. Freelancer since 2007, dedicated to building incredible, low-cost, bespoke software for tiny businesses. Also CTO at Collabor8Online.
Leeds, England