Hourly rates or fixed prices have been the only available pricing options in the independent industry for decades — but they don’t have to be.
What is value-based pricing?
It’s a recommendations system that puts the work first. Take a specific service you offer - whether a workshop you’re leading, a website you’re designing, or a blog you’re writing - and price it objectively on how much work you’ll need to do in order to complete it. We define that through 4 key areas:
Expertise - accounting for the proficiency needed to be able to tackle this work
Complexity - adjusting for the difficulty in this specific task
Time - assuming how long this will take to accomplish
Uncertainty - including buffer for services that are vague or have a lot of unknowns upfront
The four areas above are equally weighted and given a recommended point-value from 1 [very low], 2 [low], 3 [medium], 5 [high], or 8 [very high]. With the pricing levers, it’s simple, the higher the rating the further you move the lever line. For example, below the average value of the service is 4 points (2+8+3+2=15/4=3.75 rounding up to 4).
But we understand pricing doesn’t just stop at the tangible service you provide, it could also vary by client type. Many of you, like we did, give nonprofits or even startups a lower rate than a large enterprise client like Pepsi. So the system also takes the client type into account:
Nonprofit clients have a multiple of $150 per point
Startup clients have a multiple of $300 per point
Enterprise clients have a multiple of $450 per point
Coming back to that example, if you were pricing for a nonprofit, the cost would be $600 (4x$150). But for an enterprise client, it would be $1,800 (4x$450). Need to change a price half way through a project? No sweat, our platform can easily handle that for you too.
Again, these are all just recommendations. We not only allow for changes to the service or project price, but we encourage them. You’ll notice we don’t change prices based on location, as we believe you shouldn’t get paid more or less based on where you live, but we would love your thoughts on it. The system we’ve created only gets smarter the larger our community gets, and as more people adjust prices, we can begin to provide real-time, peer-sourced data on pricing. Our recommendations aren’t perfect, and that’s okay; we have decades of experience in the freelance and independent market to know that pricing can’t be right or wrong, but that it should be more thoughtfully approached.
Still have questions? We're happy to help!
Contact us at [email protected]