I was 20 when my wife & I got married and I used to play guitar for weddings to make a little extra cash. I did the first one for $40--an astronomical sum in those days, at least it was to us. And the bride didn't blink at the price. For the next wedding I changed $60 and the planners accepted immediately. At $80, still no hesitation, nor was there at $100. When I got to $125, I started getting some resistance and at $140, they balked. So I set my price at $125 and lost only a few deals.
It's really hard to ignore your costs in pricing but you should. What's the cost of a couple of hours on a Saturday? $20/hr seems more than enough! But $60+ dollars a hour was even better. My wedding planners weren't really paying for two hours on a Saturday-- they were paying for my ten years of experience that created a lifetime memory.
You don't pay a doctor by the hour, why should you pay by the hour for a musician... or a consultant? How many years of experience led to a breakthrough software or software product?
At Pragmatic Institute, we accelerate product management. We help heads of marketing get their people up to speed quickly so they don't have to do it themselves. More important, we help you deliver products to market faster and with shorter time-to-profit! What's the value of better products faster? What's the value of having standardized business cases and market requirements? What's the value of crisp positioning? What's the value of a standard, repeatable approach to product management?
So what's the value of your offering to the client? That's the question one must answer when pricing a product.
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