Intelligent Pricing Architecture is a method for consultancies and creative agencies who want to be paid what they are truly worth. You may be a digital marketing agency, a PR firm or a consultancy specialising in diversity and inclusion, or localisation, or one of a hundred different things.

Whatever you do, you deliver results to your clients by using prior knowledge, insights developed over years and, in some cases, you could even say genius. Results far out of proportion to the time you spend on the project. The crucial thing is that most of your work has been done before you even meet the client – in acquiring knowledge, insight or experience, or developing your methods.

You may be tired of being price-shopped against inferior competitors, or you may simply look at the value you create for your clients against the fees you charge and think “we’re worth more than that.”

The method is value-based pricing that actually works. If you have looked at value based pricing and not been convinced, or even tried it and found that it didn’t work as described, don’t blame yourself. Proper value based pricing is a three step process, and 99.9% of what you see, read and hear about it is only about step one. Read on and I’ll explain steps two and three.

If the value of what you do can’t be easily quantified in money, don’t worry. That’s true of the majority of firms I work with, and it’s not a problem. Value comes in many, many different forms.

If you are concerned with the subjectivity of value based pricing, you are right. People who say “it’s an art” are often glossing over the issue of getting agreement on value. Intelligent Pricing Architecture reduces this to a system.

Watch The Introductory Video

How It Works

I’ll explain the three steps of the method, and then describe how an engagement would work in practice.

A Three Step Process

The three steps are:

1. You get very clear on the value you provide (often surprising, and surprisingly difficult);
2. You convince your prospective client of that value (remembering that they see things differently from you);
3. You set things up so that you are the only credible choice.

Notice how almost all of what you have heard about value based pricing stops at 1.

Step 1 – See Your True Value

We don’t know each other yet, but I’ll venture a guess about you; if you haven’t worked intensively on it with a qualified outsider, you haven’t seen your true value. You just can’t. I can say this with confidence because nobody can. I can’t do it for myself, despite doing it many, many times for other people. As one of my associates put it brilliantly, “you can’t read the label from inside the bottle.” You need an outsider.

The value of what you do might be hard to put in financial terms. No problem. At least half of the people I work with do things which can’t be valued in money. There are many different forms of value, and we will find them. In fact, quite often even when we find some quantifiable value there is something else non-quantifiable that is more powerful.

Step 2 – Convince Your Prospective Client Of The Value

Step 1 is clearly an essential foundation, and it’s where most value based pricing approaches leave you, but stop and think.

Imagine you are on trial for a serious crime. You ask your lawyer what the defence strategy is. “No problem!” he replies. “You know you’re innocent, I know you’re innocent. We’ll be fine.”

Would you be happy with this? You’ve only done step 1. In the courtroom, you’d want a strategy and some arguments to convince 12 strangers of your innocence. And in a pricing discussion, you have to overcome the same challenge; just because you passionately believe something, or know it to be true, doesn’t mean that others do. And those others think differently from you.

This is where psychology comes in. Specifically, cognitive psychology a.k.a. behavioural economics. Behavioural economics is serious science based on rigorous controlled experiments. It won its founder a Nobel Prize (even though he wasn’t an economist). In a past life I studied it, and ended up teaching it for several years to investment bankers. (A fun experience, but a story for another day).

Once you understand the biases of the human mind, you realise that so much of what you were doing before was like trying to persuade water to flow uphill. Understand the psychology involved and you are persuading it to flow downhill. My favourite example is the 17 Words That Raised a Fee by 150% which I gave to an executive coach. You may remember it from one of my early emails.

I’ve heard it said that “pricing is a mixture of art and science.” I disagree. It’s science.

Step 3 – Become The Only Credible Choice

With step 2 completed, we have moved closer to our goal. We see our full value. Our prospective client sees our full value. Just one hurdle remains.

Suppose that the prospective client now believes that it would make sense to pay you $100,00 for a project. But what if there is someone else apparently equally qualified who will do it for $75,000? The client would be irresponsible to go with you.

You need to look unique. This is probably much easier than it first appears. The best way to look unique is to have a proprietary process for what you do. How long, you ask, does this take to create?

Much less time than you would think, is the reply. If you have been doing what you do for any length of time, you have developed an effective way of doing it. You may not see it, but it’s there. Making it visible and giving it a name can have dramatic results. Christening a process the “7Cs framework” enabled a social media agency to raise the fee from £3-5,000 to £46,000. The “OODA Loop” process created a £20k/month retainer for work previously done for free.

Your process is there. We’ll dig it out.

How An Engagement Works

We work together in a way that is designed to be flexible, economical of your time, and low risk.

At the start, we agree an expected duration – typically 3-6 months.

Over that period we meet weekly online, for 50 minutes – a commitment that’s not too hard to fit into your calendar. You don’t need to prepare for these sessions – you already know what we need to know. I do most of the hard thinking, guiding you through the process.

By the time we finish, you will be fully equipped to set fees at a much higher rate on all future projects for as long as your business remains in roughly the same form.

You pay for the sessions monthly in advance, so risk is minimised. At the end of each month you have the choice of continuing, changing direction or stopping. If availability of investment funds is an issue, we can design the programme to maximise quick wins so that it quickly pays for itself.

What To Do Next

Do you think the process might be of benefit to you? If so, the next step is to book a 30 minute, no-fee Value Discovery Session. I’ll take you through a couple of diagnostics to give you an approximate idea of the potential benefits, and give you a very broad-brush idea of how we’d set about things. I’ll also answer any questions you have. After that, it’s up to you; if you do want to go further we meet again to clarify the work and the fee.

Use the calendar below to fix a call. If you want to do the diagnostics before we meet, or to help you decide whether you want to meet, they’re here.