The second point in the Price Triangulation Mental Model (PTMM) is...value.

There’s been a lot written about value-based pricing, perhaps most notably by Jonathan Stark, who you’re likely familiar with.

So I won’t seek to recreate the wheel here.

But put simply, your clients come to you to relieve some sort of pain.

Relieving that pain could look like:

• A new product or commercial strategy
• Acceleration to market
• A process simplification
• A boost to your client’s customer pipeline or retention

The ultimate result of relieving that pain is increased profitability either through increased revenue or decreased costs, or both.

So essentially, by performing a service for your client, you’ve ‘found’ untapped value for their org.

Value-pricing suggests simply taking a 'finders fee' for that value.

And the easy starting benchmark: 10%

To find the value estimate for a customized client project, you can simply ask the client: (paraphrased from Jonathan Stark’s ‘Why conversation’)

• What’s the impact of doing nothing?
• What happens if you wait 6 months?
• What happens if you try to manage this internally?

To find the value estimate for a productized (repeatable) service, you can use your knowledge of the space to ballpark a figure based on your ideal client profile (ICP).

For this, let’s turn back to Marcos, our B2B content strategy consultant.

Marcos believes (or has seen evidence) that implementing the recommendations from his Content Strategy Intensive can increase new client inbounds by 50%…

The estimated added value from Marcos’s service based on his average client profile is $500k.

Multiply that by 10%, and $50,000 becomes the 2nd point in Marcos’s PTMM.

Notice how a range is building for the potential price of Marcos’s service?

We’ll close this triangle tomorrow. Take a guess what the 3rd point is based on…

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For more on value pricing from Jonathan, I’d recommend his free 6-day email Value Pricing Bootcamp, and his Value Pricing Calculator.

💡

-Wes