FIRM: Excellent, we are ideal for that challenge.
CLIENT: Yes but before I hire you I have a few important questions.
FIRM: Okay, shoot. What do you mean?
CLIENT: What will you charge me?
FIRM: $1 million dollars for our ability to work with your organization to create the idea, and then if we move it forward another million because truly transformational business ideas are valuable and in limited supply.
CLIENT: Why $1 million?
FIRM: What to you mean?
CLIENT: I need to know why you charged me a million.
CLIENT: Well if I don’t know how you arrived at your price, how do I know it’s fair?
FIRM: I don’t understand. What difference does it make how I arrived at the price?
CLIENT: Well if I understand how you arrived at it, then I can negotiate it down.
FIRM: But I do not want you to negotiate it down. That is money out of my pocket.
CLIENT: Yes, but it is a privilege to work on my brand and you will get lots more business from it.
FIRM: I will? Can you guarantee that?
CLIENT: No. But I still need to know how you got to your price.
FIRM: Well OK…I looked at the size and scope of the opportunity and considered the value of us addressing it for you and calculated a price that I am willing to do it for. A price that I believe to be competitive in the market and a price that affords me the peace of mind that I can make a bit of money.
CLIENT: Oh, but I need more than that. I need to know who will do the work… And the amount of time it takes for them to do it.
AGENCY: The team I said will do the work…and it will take as long as it takes until we have an outcome that everyone is happy with.
CLIENT: Yes…but what if just one person cracks it in one day…and you then execute
It with a small team in 3 weeks – that is not worth a million dollars.
FIRM: You’re 100% correct. It’s worth more…. If that happens, we will double it!
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Such is the brilliant defense of Jason DeLand of Anomaly, one of the leading advertising agency luminaries in the realm of value-based pricing. Go thou and do likewise.