Pricing models are useless
Posted: Sat Dec 28, 2024 9:19 am
Ready-to-use ideas
(abandon them and set your own price)
What sound does a tree fall in a forest make if there is no one there to hear it?
It's a strange question, taken from a Zen proverb, but it frames the problem well.
Without a project to measure the impact of your work , that is, the “noise” that you should generate for him… how can you give a value to your work a priori?
The truth is that there are several theoretical models to define your pricing, but, as Iacopo explained, only one is valid if you want to make the leap in quality:
Social Convention : According to this model, you should set your price based on what other freelancers in your industry choose. The idea is to level with the market standard. But… do you want to be a market standard? It doesn’t work, no one can tell you what your price is. Only you can.
Time : You could set your price based on the time it takes to do that job, but that would be the wrong model to rely on. Do you know why? It creates an ethical dilemma whereby you will want to spend list of telegram users in iraq more time while your client will spend less, you will make yourself comparable (freelance worker) , the unforeseen events will be borne by the client with whom, therefore, you will have to continue to deal and he will want to question how you spend your time. Focusing on time is never a good idea.
Costs + markup : How much will you incur to do this work? For some, this question is the first step in a pricing model. They just need to add a percentage more for profit margins and they are set. But, again, here you shift the focus of your work, this time on the costs to be incurred. There is a risk that the client will come to question these costs of yours and, let's face it, they are not the ones who determine your value.
Value : The truth is that previous models fail because they are based on rationalizing their price. It is a worker's attitude. You have to think like an entrepreneur, because the best pricing is based on the value given to the individual customer. This means that you have to price the customer and not the work, you have to talk about value or impact and not hours or costs and you have to think like a partner on the same ethical level. Therefore, two companies with different budgets should pay you different amounts for the same work. What counts are the results that the specific business will be able to obtain thanks to your contribution.
One to keep an eye on
Here are our top study materials to help you become a rockstar freelancer:
(abandon them and set your own price)
What sound does a tree fall in a forest make if there is no one there to hear it?
It's a strange question, taken from a Zen proverb, but it frames the problem well.
Without a project to measure the impact of your work , that is, the “noise” that you should generate for him… how can you give a value to your work a priori?
The truth is that there are several theoretical models to define your pricing, but, as Iacopo explained, only one is valid if you want to make the leap in quality:
Social Convention : According to this model, you should set your price based on what other freelancers in your industry choose. The idea is to level with the market standard. But… do you want to be a market standard? It doesn’t work, no one can tell you what your price is. Only you can.
Time : You could set your price based on the time it takes to do that job, but that would be the wrong model to rely on. Do you know why? It creates an ethical dilemma whereby you will want to spend list of telegram users in iraq more time while your client will spend less, you will make yourself comparable (freelance worker) , the unforeseen events will be borne by the client with whom, therefore, you will have to continue to deal and he will want to question how you spend your time. Focusing on time is never a good idea.
Costs + markup : How much will you incur to do this work? For some, this question is the first step in a pricing model. They just need to add a percentage more for profit margins and they are set. But, again, here you shift the focus of your work, this time on the costs to be incurred. There is a risk that the client will come to question these costs of yours and, let's face it, they are not the ones who determine your value.
Value : The truth is that previous models fail because they are based on rationalizing their price. It is a worker's attitude. You have to think like an entrepreneur, because the best pricing is based on the value given to the individual customer. This means that you have to price the customer and not the work, you have to talk about value or impact and not hours or costs and you have to think like a partner on the same ethical level. Therefore, two companies with different budgets should pay you different amounts for the same work. What counts are the results that the specific business will be able to obtain thanks to your contribution.
One to keep an eye on
Here are our top study materials to help you become a rockstar freelancer: