Tags: pricing, value-based-pricing, consulting, fractional, scope
Someone recently asked about handling scope creep with value-based pricing. They were worried about distinguishing between intentional and unintentional scope changes. But the real issue was deeper—they thought “value-based pricing” meant being flexible with scope to provide more value after the sale.
It doesn’t.
Value factors into price.
Value doesn’t have to factor into scope.
It’s “value-based pricing” not “value-based scoping”!
The price of a project should reflect the value your client perceives. The scope should reflect exactly what you’ve agreed to deliver—not more.
A grifter selling fake Rolexes practices value-based pricing every day. You don’t think he’s offering you the same price he offered someone else, do you? He’s reading your perception of value (though hopefully you’re being more honest than he is).
When pricing services, we typically have several models:
Time and Materials
This is $rate plus materials or consumables at markup. You’re charged based on actual hours and materials consumed. Your local auto mechanic, machinist, or cleaning service likely uses T&M billing.
Hint: You can still value-price T&M work—your hourly or daily rate doesn’t have to be fixed.
Book Rate (Fixed Price)
A “book rate” sets a predefined price for tasks with reasonably predictable effort. Think of how auto dealers price repairs: replacing an air cleaner might be billed at 1 hour, changing the oil at 0.5 hours, or rotating tires at 0.75 hours, based on standard reference guides (“the book”). If the job actually takes less or more time, the shop absorbs the difference as profit or loss—and sometimes it even affects employee bonuses.
In consulting, fixed-price proposals usually fall into this category. The agreed-upon scope clearly defines the price—if work exceeds that scope, it’s billed separately.
Yes, book rates can be value-priced. A Ferrari dealership and a Ford dealership (even under the same ownership) may charge very differently for identical tasks like oil changes (ignoring materials for a moment). That difference is entirely about perceived value.
Retainer
Retainers sell access and availability—you’re ensuring someone is ready and available, without necessarily committing to specific deliverables or outcomes.
Subscription
Subscriptions generally involve recurring, predefined deliverables (e.g., monthly reports, ongoing development). Unlike retainers, subscriptions explicitly define regular outputs.
Subscriptions are often not VBP because they’re an advertised price, so everyone pays the same.
Pre-Paid Blocks of Time
Similar to T&M, but hours are purchased in advance. These hours may have an expiration and feel like retainers but remain fundamentally about purchasing blocks of time.
Outcome-Based
Pricing directly tied to achieving results. “I’ll boost your checkout conversions by 10%, and charge you 1% of annual revenue.” This directly connects pricing to measurable outcomes—classic VBP territory.
Hybrid Models
Combinations of the above—subscriptions plus outcome bonuses, retainers plus T&M, or…? Hybrid models are flexible and widely used.
Almost any pricing model can be value-based—or standard-priced. But here’s the essential truth:
You can’t measure your value to the client—only they can.
Your job is to understand their perception of value and set your price accordingly. But managing your scope clearly is essential. If a client requests something outside scope, handle it directly and transparently, not confrontationally:
“This sounds valuable. Let’s finish our agreed scope first, then discuss how to handle this new request.”
Remember: PRICE is NOT COST. Your price must exceed your cost because you’re running a business.
The biggest killer of time-based billing is confusing your hourly rate with your cost. Agencies never bill their teams at cost—so why would you, as a soloist, price yourself at cost?
Keep your scope tight, your pricing reflective of value, and your boundaries clear. Your business—and your sanity—will thank you.
I provide advice and coaching for fractional professionals looking to build sustainable consulting practices. Want to learn more?
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