Eric Siu breaks down how to price based on client value instead of hourly rates. A $10k client might see $100k in annual value from your work, while a $100k client sees $1M. The difference is asking what success is worth to them, then taking a percentage of that upside.
I was actually listening to calls from like 8 years ago when I was on sales calls, right? And so you want to know the difference between a $10,000 a month contract versus a $100,000 a month contract? Literally, I would just say, hey Neil, so what metrics do we need to hit exactly to be successful, right? And then I'll be like, okay Neil, what's the value of meeting that metric? Oh, okay, $10 million. Well Neil, let's just say hypothetically we can guarantee that we can hit the $10 million 100%. Is it fair for you to pay us $1 million? Why yes, Eric, if you can guarantee it, right? Nobody is going to say no to that, right? I'm going to, I'm like, I'm listening to this segment of the call and literally we priced it on value. We said, okay, if we think 50% success rate for us, we're going to take that 50%, multiply it by that 10%, right? Which is $1 million. Yeah. Then that, the high end of the contract is going to be $500K, then $250K, then like $125K. Okay. Instead of just saying, we're just going to charge you $3,000 a month, which is what SMB people are used to selling. So long story short, I listened to that segment. We had priced this thing on value, okay? And basically one of the deals was, the guy was like, oh yeah, no, we don't do the smaller ones. We're going to do the $100,000, okay? But like that, it was just reframing a little bit, asking a little more, asking about the value. And you can't do that for everyone, by the way, just keep that in mind. But the more you can frame around value-based pricing, the more successful you're going to be.
