Imagine that you were commissioning the development of a new home for you and your family. What would you look for in a bid from a contractor? Would you be satisfied with one option, one price? A quote that lays out averaged costs in the most generic of terms? Boiler plate descriptions of process and procedures that fail to address your specific needs and desires?
Buying a Web site (or any user experience) design shouldn’t feel like this—and yet, consider how we often pitch, scope and quote on projects.
We put together a statement of work that estimates the costs on an “average per-square-foot” basis (e.g. number of templates). We talk about us: our process, our people, our proven track record. If we’re placing a fixed bid, we typically propose one option and one price that studiously and reflexively attempts to cover off everything in the brief.
A couple of weeks ago, Jon posted up some thoughts on why we’re switching from costs-plus to a value-based pricing model. This generated a very lively discussion, which—if I were to summarize it—really boiled down to a sentiment of “that’s great, but how do we do this?”
Since then, we’ve experimented with a number of pricing options and strategies. I’d like to share one that we think shows a lot of promise.
A tiered model for value-based pricing
A tiered model lays out multiple options at different price points and empowers purchasers to make better, more informed decisions that feel less arbitrary. I wish I had a simpler name for it, because it really is a very standard and straight-forward way to price things out. Here’s a template that we developed for a recent client:
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