The Entrepreneur Forum | Financial Freedom | Starting a Business | Motivation | Money | Success

The Entrepreneur's Forum for learning how to build wealth and financial freedom the Fastlane way!

Say "NO" to mediocre living rife with jobs, ascetic frugality, and suffocating savings rituals— learn how to build a Fastlane business that pays both freedom and lifestyle affluence. Join our forum with more than 70,000 entrepreneurs who are making it happen.
Join for FREE Today
Get the books
Remove ads? Join Fastlane INSIDERS
(Registration removes this block)

How do I Price this?

_doin_my_best

New Contributor
Aug 15, 2018
3
1
Hi all,

Thanks for letting me into the forum @MJ DeMarco DeMarco. Im looking forward to this forum and adding what I can where I can while learning a great deal. I've had a successful career in sales for over 20 years but venturing off on my own with an idea that we believe has legs.

My dilema... I believe the right pricing model I should use is value-based. The question is how much is an "industry" standard if there is such a thing. My calculations suggest I can save a client $1M a year for a particular program while significantly enhacing their program. In addition the solution alleviates significant internal resources to focus on other projects.

If I can save them $1M, increase employee engagement, and alleviate internal resources, what percent of the $1M do I charge?

Look forward to any and all feedback.
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.
Last edited:

Real Deal Denver

Gold Contributor
Read Fastlane!
Read Unscripted!
Speedway Pass
Jan 13, 2018
888
2,160
68
Denver, Colorado
Hi all,

Thanks for letting me into the forum @MJ DeMarco DeMarco. Im looking forward to this forum and adding what I can where I can while learning a great deal. I've had a successful career in sales for over 20 years but venturing off on my own with an idea that we believe has legs.

My dilema... I believe the right pricing model I should use is value-based. The question is how much is an "industry" standard if there is such a thing. My calculations suggest I can save a client $1M a year for a particular program while significantly enhacing their program. In addition the solution alleviates significant internal resources to focus on other projects.

If I can save them $1M, increase employee engagement, and alleviate internal resources, what percent of the $1M do I charge?

Look forward to any and all feedback.

I would approach this as a lawyer on contingency would. Or, for another example, Howard Stern's deal on satellite radio. Lawyers only get paid if they win, and Howard Stern got a huge bonus based on performance stats, which he met, by the way.

Both of these deals have one thing in common. They set up goals, and then paid a set amount when those goals were reached. If there are no results, there is no cost to the client/customer.

This is a win win for everyone. Lawyers usually take 1/3 as a rule of thumb. And when they win, the payout for them is big. What customer/client could turn that deal down? No risk for them - and no cost if there are no results.

You have to make them a deal they can't refuse. If you draw this up correctly, everyone should be happy with the deal. And then, the NEXT one you can really make money on...
 

_doin_my_best

New Contributor
Aug 15, 2018
3
1
I would approach this as a lawyer on contingency would. Or, for another example, Howard Stern's deal on satellite radio. Lawyers only get paid if they win, and Howard Stern got a huge bonus based on performance stats, which he met, by the way.

Both of these deals have one thing in common. They set up goals, and then paid a set amount when those goals were reached. If there are no results, there is no cost to the client/customer.

This is a win win for everyone. Lawyers usually take 1/3 as a rule of thumb. And when they win, the payout for them is big. What customer/client could turn that deal down? No risk for them - and no cost if there are no results.

You have to make them a deal they can't refuse. If you draw this up correctly, everyone should be happy with the deal. And then, the NEXT one you can really make money on...

Thanks RDD! I appreciate your insight and perspective. I have thought about that approach but I already know the outcome (more or less and will be confirmed prior to pricing) from a savings perspective and equally comfortable with my expected costs (+some).

The difference I see in the examples you suggest is there are unknowns in each scenario where in my case the outcome is (would be) definitive before launch. That is why I'm struggling. Does that entitle me to a bigger slice or a smaller slice?

Thanks again!
 

_doin_my_best

New Contributor
Aug 15, 2018
3
1
Thanks RDD! I appreciate your insight and perspective. I have thought about that approach but I already know the outcome (more or less and will be confirmed prior to pricing) from a savings perspective and equally comfortable with my expected costs (+some).

The difference I see in the examples you suggest is there are unknowns in each scenario where in my case the outcome is (would be) definitive before launch. That is why I'm struggling. Does that entitle me to a bigger slice or a smaller slice?

Thanks again!

PS.... Go Buffs!
 
Don't like ads? Remove them while supporting the forum: Subscribe to Fastlane Insiders.

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

Guest post submissions offered HERE.

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Ideas needing execution, more!

Join Fastlane Insiders.

Must Read Books...

Explore books recommended by MJ DeMarco and other members of the Fastlane entrepreneurial community.
Fastlane Bookstore
Top