Uncover what solving the problem is worth to your client, then set your fee against that value and not your hours. The price comes from the value, and the value comes from the conversation you have before you ever write a number down. You decide the figure; you don't calculate it.
Ask what changes for your client when the problem is solved, and price against that answer.
The same work is worth different amounts to different clients, so only their outcome can set the number.
On your next call, ask what happens to the business if nothing changes in twelve months.
The price comes from the value, and the value comes from discovery.
Leah Neaderthal, Smart Gets Paid
Value-based pricing sets your fee according to what the outcome is worth to the client who buys it, and never what the work costs you to produce. A yard of plastic, some plastic handles and a canister of compressed air is worth about the price of the materials. Assembled into a life vest, in an emergency, it's priceless. Nothing about the inputs changed.
The three things a client is deciding between are always the same:
I teach that as defined Value, defined Engagement, defined Price, and the clearer each one is, the easier your client finds it to say yes. Notice the order. Price is the last of the three, and it's the last for a reason: a number with no value attached to it is just a number.
You find out by asking, in the sales conversation, what changes for their business when the problem is solved and what it costs them while it stays unsolved. This is discovery, and it's the reason there's no formula in this method: the value lives in your client's answers. Your spreadsheet doesn't have it.
What you're listening for, in order:
A useful discipline is to keep laddering up. A new set of cabinet fronts is a tactic. Fitted into drawers, it becomes an outcome. Shown as a finished kitchen, it becomes value, and your client can finally see what they're buying. Move every answer up that ladder before you price it. The questions that get you there belong to the first call.
Four parts, and only the last one is a number. Each does a job your client needs done before they can decide.
| Part | What it does |
|---|---|
| A value-based title | Names the outcome, so the engagement is about their future |
| Core activities | What must happen to solve the problem, described as work |
| Race Track Items | High value to your client, low lift for you, mixed into the program |
| The price | Set against the value of the outcome. You decide it |
Race Track Items are the part consultants leave money on. They are the things you already do and never mention: the review of a document before it goes to their board, the ten-step process you could write down in ten minutes, the executive session, the check-in call the week they present.
One client raised the value of her services by $7,000 using this alone, without changing a single thing about the work she delivered. Clients never value what they don't know they're getting.
Pricing your own worth asks you to do something the evidence says women systematically get wrong, and pricing your client's outcome sidesteps that problem entirely.
Exley and Kessler ran a series of experiments on how people describe their own performance and found that women rate themselves substantially lower than equally performing men.
Asked to agree with the statement "I performed well on the test" on a scale of 0 to 100, the average man rated himself 61 and the average woman 46, a gap of 15 points, while both groups had answered the same number of questions correctly. The gap held when the researchers removed differences in confidence and when they removed any strategic reason to talk yourself up.
If your pricing method requires you to appraise your own value and put a number on it, it's running straight into that. So we don't ask you to. We ask what the outcome is worth to the client, which is a question about their business and has an answer you can go and find out.
For years women have been told to know their worth. It is meant kindly and it's nearly useless as an instruction, because we inherited a few hundred years of women's work not being paid, not being valued, and more recently not being paid equally. You can't flip that switch because someone told you to.
So my system doesn't ask you to price yourself. It asks what the work is worth to your client, which is a fact about their business that you can uncover by asking good questions. That is a much easier question to answer straight, and it happens to produce bigger numbers.
There is one more thing hourly pricing does that this fixes. When you bill for time, your goals and your client's goals point in opposite directions: they want it done fast, you get paid for it taking long. Price the outcome and you both want the same thing, which is the outcome. That is when the relationship stops having a small argument running underneath it, and your expertise starts working for you.
Most clients won't name a budget early, and you don't need one to price the work. What you need is the value, which comes from what the problem is costing them and what changes when it's fixed. Ask those questions instead. A client who can't describe either usually hasn't decided the problem is worth solving yet.
Plenty of valuable outcomes resist a clean number: reputation, retention, a leadership team that finally agrees. Describe the end state and skip the calculation, and let the size of the change carry the weight. Value-based pricing doesn't require you to prove a return in a spreadsheet. It requires you to understand what's different afterward.
No. Charging what the market will bear starts with what you can extract. Value-based pricing starts with what the outcome is worth to that client, which is why the same work carries different fees for different clients and why nobody feels squeezed. The client gets a result worth more than they paid, and you get paid for the result.
You can price your own scope on value, and you'll usually be negotiating inside someone else's structure and rate card. Treat subcontracted work as a different line of business with its own economics, and know your floor before you agree terms. What you shouldn't do is let a subcontracting rate become the anchor for what you charge your own direct clients.