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Why Value-Based Pricing is Good for Business

By: Jonathan Downie    Date: July 26, 2016

We all know the feeling: we are talking to a client and its gets to that magic moment when they ask for a price. In a split-second, there are several questions going round your head:

 

  • Do I give them my standard price or offer a discount or even take the opportunity to raise my rates?
  • Do I charge hourly or daily or by some other measure?
  • What should I include?
  • Will someone underbid me?
  • How quickly should I send the quote?
  • How much room for negotiation should I leave?

 

Unless we have become too experienced or blasé that each individual assignment means little to us, that vital quoting stage can become a site of real mental effort. But there is another way.

 

It’s a way I first heard about in Warsaw at TLC 2015 when Alessandra Martelli of MTM Translations talked about negotiation. Rather than sending a price straightaway, she makes sure that she knows exactly what the client wants and then sends a price that details exactly how it will fulfil their needs.

 

She told us that making that one change meant that she now wins 80% of the projects she bids for. That is pretty amazing given what many of us in interpreting or the events sector might experience. That one figure alone got me thinking about how I relate to clients.

 

The next step in the journey was finishing writing my first book, Being a Successful Interpreter: Adding Value and Delivering Excellence. The key message of the whole book is that interpreters need to concentrate on the value they add to clients, over any other measure. The logical outcome is that we need to stop using “market rates” and a start pricing interpreting according to the value it has for each client.

 

Then today, the last piece of the puzzle fell into place. There was a discussion about pricing models in a Facebook group for professional speakers that I am a part of. Alan Stevens, an experienced speaker and media trainer in his own right, mentioned that instead of pricing according to hours spent or service, he talks to the client about what they want to gain from his work and prices accordingly!

 

Bingo!

 

While “market rates” seem to take away any need to make pricing decisions, they actually take away a vital point of connection with clients. Instead of finding out exactly what they need, we just slap a price on each day and waddle off.

 

Value-based pricing forces us to really think about how our clients are benefiting from our services and encourages us to be more transparent with the difference that we can make for their business. So the next time you are asked for a quote, take the opportunity to slow things down a little. Email (or even phone!) the client and talk to them about the value of the event for them. Start a dialogue about what success looks like for them and how much they stand to make from it.

 

Armed with that information, send them a custom-made quote that shows that you really understand what they are trying to achieve. Show clearly how you will deliver the service that your client needs and wants and price accordingly.

 

And, if you need an experienced French to English and English to French interpreter to help you deliver the goods, drop me a line.