What Is Value-Based Pricing
How Does Value-Based Pricing Differ From Other Pricing Methods?
“Clients Value the Solution You Offer, Not Your Time”.
Value-based pricing is a marketing strategy that sets prices primarily based on the perceived or estimated ‘value’ of a service to the client, rather than solely on the cost or time spent. ‘Value’ encompasses benefits, service quality, speed & efficiency, relationships, accessibility, advice, or even an innovative solution.
Different Kinds Of Fee Structures Used By Professional Service Firms
1
Time-Based Pricing
The price of professional services is determined by the time invested in completing the work.
Traditional Pricing
90% of Service Firms
2
Competitor-Based Pricing
This pricing method prioritises data from competitors and the market over production costs.
Traditional Pricing
5% of Service Firms
3
Value-Based pricing
The price is based on the perceived, expected, or required value of the solution or service to the client.
Pricing of the Future!
Surplus / Optimal Profit!
Why Choose Us?
Surplus Pricing Software is not just a tool; it’s a strategic asset that empowers you to optimise pricing, increase profitability, and drive sustainable growth for your services business.
The Challenges With Hourly Billing
- Hourly billing focuses solely on time rather than the value provided, stifling innovation and entrepreneurial spirit.
- It fails to effectively manage project risks and discourages technological advancements by penalising efficiency.
- Moreover, it commoditises expertise into a single rate, limiting differentiation and disregarding the firm's assumed risks.
- Hourly rates impose an artificial income ceiling and consume valuable resources that could be better spent on purposeful pricing strategies.
- Quoting becomes inconsistent and time-consuming, while profits and turnover face downward pressure.
- Challenges with cash flow, production pressure, and resource allocation arise, leading to client conflicts and inefficient resource usage.
- Directors and seniors become overly involved in client work, hindering firm growth and development.
- Value-based pricing empowers firms to prioritise client needs, drive innovation, and maximise efficiency for a more prosperous and client-focused future.
