A New Technology Case Study Posted

Aries Technology Group of Knoxville, TN, sent in this case study on Pricing with Purpose. It is published for those of you who are always saying “Ok, I like the idea, but how do you do it in the real world.”


  1. More details please, it was more of an example of how it was pitched to the client than the mechanics of how it was completed (case study).

    Don’t get me wrong, I totally drink your kool aid and want to do this sort of thing myself more.

    In my case, I can provide a particular service that for example, may cost $4k in billable hours, but conceivably triple that in ‘value’ to a customer. So I could (and am starting to) present value pricing to my customers.

    Thing is, I still have contractors (not employees) that have to stick to my estimate–if I know it’ll take 100 hrs (no matter what my ‘value’ price) any inputs exceeding that 100hrs begins to erode my new, much higher, margins.

    Also, I need to keep track of inputs to make sure tasks stay in line with my initial estimates. If things start to creep, then I need to address it with the customer (a change order). Without keeping track of inputs (hours), what’s my indicator that we’re not getting off track?

  2. eric, (to distinguish from Eric),

    I also thank you for writing in. Aside from Eric great response, I would add my newly coined Kless’ Law – Your need to keep track of time is inversely proportional to your project management ability. If you (and your subcontractors) are good at what you do, time tracking in useless. Having a great scope document (see my post at http://www.verasage.com/elements_of_a_scope_document) and avoiding scope creep (http://www.verasage.com/elements_of_a_change_request/) and scope seep (see Alan Weiss’ post at http://www.contrarianconsulting.com/scope-seep/).

    In addition, please read Ron Baker’s posts on timesheets:


  3. The nuance of this case study that appeals to me is that while most service providers are negotiating their prices: trying to do things cheaper; in less time; adding bonus offerings to sweeten the pie … by using value-based pricing the client negotiates with themselves about which option they should choose.

    There is a lot of myth in the professions that it is a price sensitive market/industry.
    No it is not … it is a “value-sensitive” market/industry and by articulating your value proposition in terms of tangible and intangible results, objectives achieved and outcomes for the client, the focus is where it should be: on the business at hand not the price tag.

    Ric Willmot

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