What is your price based on? There are at least 3 ways to answer this without passing the responsibility to somebody else.

  • Input-based foundation: my price is based on time, materials, and other costs I had to be able to do this (education, experience, certification, etc.)
    As it focuses on quantity rather than quality, it’s a poor choice for fields where our experience makes us work faster and better.
  • Output-based foundation: my price is based on the list of things you get out of it, like the number of square meters, pages, meetings, posts, kilos, pictures, characters, days in a hotel, miles of flight, hours of coaching, etc.
    It retains the focus on quantity, so it’s a bad fit for fields where “less is actually more” – more visits to your dentist, more hours of a keynote speech, and a longer court case are all things people actually want to pay to avoid, not pay extra for.
  • Value-based foundation: my price is based on the value of what you get from me, the net change from where you were before the service to where you will be after it.
    Clients pay us to hasten a change they desire or slow down change that scares them. If this is achieved, the service has been successful. If they are not met, it’s a failure, despite any inputs or outputs provided .

All of them have their place, the trouble is first two are often used where the third one would make the most sense.


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