Value based pricing sets your number by what the outcome is worth to the buyer and by the position of your brand, never by what the work costs to deliver. For expert services that’s the difference between billing your days and being commissioned for your judgement. The textbook version is correct. It stops one step short of where experts need it.
Simon-Kucher price to perceived value rather than to cost, which is right as far as it goes.
Why it stalls for experts
The method is sound and the person delivering it wobbles.
You can work out the value honestly. A repositioning that moves a practice from $20,000 engagements to $250,000 ones is worth far more than the fee either way, and the arithmetic isn’t hard. Then you have to say the number out loud to a human being, and something happens in your chest.
A $5,000 offer and a $250,000 offer are sold by two different people. Same expertise, same evidence, entirely different bearing in the room. Most of the discounting I’ve ever seen happened in that half-second gap between thinking the number and saying it.
Almost everybody recognises it, and almost nobody admits it, which is why so much pricing advice is written as though the obstacle were a spreadsheet.
There’s a second stall underneath the first, and it’s structural rather than emotional. Value based pricing assumes the buyer can see the value before they commit, and for expert work they very often can’t. They’re buying judgement they lack the judgement to assess.
Which means the number has to be carried by something other than the proposal. It’s carried by position, by evidence with names attached, and by the way you hold the figure in the room. Get those three right and the value conversation becomes almost unnecessary. Get them wrong and no amount of value framing will save the quote.
Which companies use value-based pricing?
Every luxury house on earth, and none of them mentions cost.
Rolex, Aman, Savile Row, the Geneva watchmakers. Not one of them prices from a cost sheet, and not one of them discounts to fill capacity.
What they share is a decision about position taken before any number existed. The number then falls out of the position almost mechanically, which is the opposite of how most experts do it.
Chanel is the clearest case, and it’s worth the detail. She began at the very top of the Paris market, dressing high society in bespoke gowns made by the best artisans in the city. Only once the name meant something did she descend, into ready-to-wear, into boutiques in the most expensive locations on earth, and eventually into the perfume that made her a household name.
She never climbed. She descended, from a position of total authority, and every tier below the first was priced by the authority established above it. Brand equity flows downward. It has never once flowed up.
Run that in reverse, which is what the offer ladder asks you to do, and you spend years teaching a market to associate your name with the cheapest thing you sell. Then you raise the number and wonder why the market flinches. The market is being consistent.
Our whole argument at Iconic Empire is that an expert practice is subject to the same physics and has simply never been run like one. The full version of that argument is Iconic Influence, and the pricing side of it sits on the live premium pricing strategy post.
What I use instead of a price list
Three variables, and your costs aren’t one of them.
We call them Iconic Mastery, Iconic Connections and Iconic Presence, and they’re the three pillars behind the Iconic Pricing Calculator. Mastery is the depth and the evidence of it. Connections is who you can actually reach and be introduced by. Presence is how the market currently reads you.
Move any one of the three and the defensible number moves with it. That’s why a repricing on its own so often fails. The number went up, none of the three pillars moved, and the market quietly declined to carry it.
Mastery is the easiest of the three to underrate in yourself, and the hardest to move quickly. Most experts reading this are already at the ceiling of it and have been for a decade, which is precisely why raising the number feels dishonest when it isn’t.
Connections is the one people skip, and it’s the fastest mover. Who can introduce you, who already trusts you, and whose name attached to yours changes how you’re read. Most serious engagements I’ve watched close came through a warm route, not a cold one.
Presence is the one that gets confused with visibility. Presence is how the market reads you when you aren’t there, which is a function of what you’ve published and what your proof says. You can be very visible and very badly positioned, and plenty of people are.
The sequence that works is reposition, then repackage, then reprice, in that order and not a different one. I’ve watched people try it backwards for a decade and the result is remarkably consistent, in the way that walking into the same doorframe twice is consistent.
Ryll Burgin-Doyle is an industry consultant whose own account of this is the cleanest I have. “My original dream was to have a Family Office. This is accelerating now into reality. In the last two weeks, we have signed two clients at $500K each. So we’ve just secured $1M in highly profitable, booked revenue.” Her earlier line, on the same wall of stories, is that the work she used to charge $20K for is a long way behind her now.
Saying the number and not flinching
You say it once, plainly, and then you stop talking.
The flinch has a sound. It’s the extra sentence after the number, the one that explains, justifies, or hints at flexibility. Premium buyers hear that sentence very clearly, and what they hear is that you don’t believe your own figure.
What replaces it is an investment statement you’ve rehearsed until it’s boring. The number, the scope, what happens next. No ladder of options, no discount for deciding this week, no urgency device. Nothing about a deadline has ever made a serious buyer more confident.
The team and I have run this with hundreds of experts, and the flinch is identical in coaching, law, film and medicine. It is not a sector problem.
If you’d like to talk about your own number, the application is the way in, and both rooms are by application because we’d rather tell you honestly when it isn’t your time.
Kathryn x
FAQ
What are some examples of value-based pricing?
A repositioning engagement charged against the lift it creates rather than the hours it takes. An advisory retainer priced on the decisions it improves. A commissioned piece of work where the fee reflects what having it changes for the buyer. In each case the number comes from the outcome and the position, and the cost of delivery never enters the conversation.
