The risks of pricing different

Pricing different than the convention (cost-plus pricing, hourly, input-based, market-based, etc.) is risky.

It pushes you to think in different terms. Not only on what you do, but on what your customers actually get.

• It’s harder, more complex and more fluid.
• It changes on the context, not on the work done or product itself.
• It changes on the customer.
• It pushes you to say no to most prospects.
• It pushes you to detach what you charge from what it costs you.

This is all risky, as it means you’ll churn customers, you’ll fire some, you’ll have to choose. You’ll stop getting revenue from the ones you let go.

It’ll make you look like you’re not growing (by the standards of everyone else). In fact, you might shrink.

With higher and healthier margins.

With right-fit customers.

With better work to be done.

With more space to do new things.

You’ll grow by shrinking.