Eric Siu shows how value-based pricing works. A client paying $5,000/month agreed to $600,000/year after Siu tied the fee to a $10M business goal, offering a $1M flat fee or tiered pricing instead.
Here's how you can use value-based pricing to capture more than 10x the value. So this is a real-life example that we use, and a client came to us and they had goals that they wanted to hit. We said, what are your goals? And they told us, and then we said, hey, what is the approximate value of hitting this goal? They said $10 million. And we said, okay, well, if we can guarantee you the $10 million, we could hit that goal, then would you pay us 10% of that, which is $1 million? They said, sure, absolutely, if you can guarantee it. So we went back to the drawing board behind the scenes and we basically mapped out what we thought was realistic. So we then created 3 pricing tiers. The highest pricing tier was basically for $600,000 a year. That ended up being $50,000 a month, and the client ended up choosing the highest tier. Long story short, instead of charging $5,000 a month, we ended up charging $50,000 a month.
