Pricing for Services, Contracts & Retainers Playbook
- Practitioner
- Intermediate
- Template Included
A framework for pricing services, contracts, and retainers — moving beyond time-and-materials or cost-plus pricing toward value-based and outcome-oriented pricing models where appropriate, capturing genuine value delivered rather than defaulting to input-based pricing that caps revenue at cost recovery plus margin.
Why would a services business move away from time-and-materials
pricing, which feels straightforward and defensible? Time-and-materials pricing caps revenue potential at cost recovery plus a margin, missing genuine value capture when the service delivers outsized client value relative to hours invested — value-based pricing can capture more of this genuine value, though it requires more sophisticated value articulation and client trust.
What's a realistic first step toward value-based services pricing
for a business currently using time-and-materials? Piloting value-based or outcome-oriented pricing for a specific engagement type where value is clearly measurable and the client relationship supports this pricing conversation, rather than attempting a comprehensive pricing model change across all services simultaneously.
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