Revolutionizing Professional Pricing Models with Deliverable-Based Pricing
In today’s fast-evolving professional services landscape, traditional time/effort-based pricing models are being disrupted by the advent of artificial intelligence (AI). As AI streamlines processes and increases efficiency, pricing by the hour no longer accurately reflects the value of services provided. This shift necessitates a move towards deliverable-based pricing, also known as asset or outcome-based pricing.
The Limitations of Hourly Pricing
With the rise of AI, core processes in professional services are becoming more time-efficient. Charging by the hour without factoring in this increased efficiency results in undervaluing services. Enter deliverable-based pricing, a model that allows businesses to align pricing with the true value they provide, irrespective of the time or effort invested.
Embracing Deliverable-Based Pricing
Rather than billing based on time spent, deliverable-based pricing focuses on tangible outcomes, enabling businesses to offer customized quotes tailored to individual client needs. This approach enhances transparency, clarity, and value perception for clients, serving as a powerful marketing tool and simplifying the pitching process.
Overcoming Resistance to Change
While transitioning from time/effort-based pricing may seem daunting, it is essential for business growth in the age of AI. By establishing a cost-plus framework for services and leveraging tools like configure, price, and quote (CPQ) software, businesses can navigate this shift efficiently. Embracing deliverable-based pricing early ensures competitive advantage and avoids rushed decisions in the future.
The Path to Success
Time/effort-based pricing has outlived its usefulness in many industries due to AI-driven efficiency gains. By proactively adopting deliverable-based pricing, businesses can stay ahead of the curve, delivering enhanced value to clients and securing long-term success. The businesses that adapt early and strategically will emerge as winners in this era of pricing evolution.
About the Author
Tracey Shirtcliff is the Founder and CEO of SCOPE Better, a Pricing Platform designed for professional services. With a passion for transforming pricing strategies, Tracey empowers businesses to thrive in a rapidly changing market environment.
By embracing deliverable-based pricing and adapting to the demands of AI, businesses can maintain competitiveness, drive growth, and enhance client relationships in the evolving professional services landscape.
