BRX Pro Tip: Outcome Based Pricing
Stone Payton : Welcome back to Business RadioX Pro Tips, Stone Payton and Lee Kantor here with you. Lee, we just had a conversation on this topic offline, but let’s bring it online and talk a little bit about pricing strategy, particularly in the professional services arena.
Lee Kantor: Yeah, there’s something called outcome-based pricing. And it’s something that you should consider when it comes to pricing. With outcome-based pricing, what your customer pays is tied to the results they achieve from your service, not just the resources or the time that you’re putting in. And I think this approach aligns with your incentives, and it aligns with your customer success.
Lee Kantor: So, you’re not just selling a solution. You’re partnering for a measurable result. So, customers pay when they see real value, which builds trust and deeper relationships. But to make outcome pricing work, you have to define quantifiable success metrics before you begin. And those success metrics could be leads generated. It could be sales growth. It could be operational savings. Whatever they are, you have to both be clear, and it has to be something that’s transparent.
Lee Kantor: And there should be a place for both sides to share the risk and share the reward. And upfront investment from the customer is going to keep everybody engaged. And you know, skin in the game is important, but most of your – it would be great if most of your compensation though comes from delivering upon those agreed outcomes.
Lee Kantor: So, invest in tracking and analytics to measure the progress, and communicating results transparently is going to keep everybody kind of focused and on the same page. But ultimately, when you’re pricing is tied to the customer outcomes, everybody’s going to win.
