The Difference Between Menu Pricing and Productized Services
On episode 235 of The Freelancers Show, Jonathan Stark talks about The Difference Between Menu Pricing and Product Services. This episode is a follow-up to the previous one on productized services. Stay tuned and learn more about today's topic.
Menu Pricing Equivalent to Productized Services
Menu pricing depends on the specific deliverable. For instance, you're into creating or designing slide presentations. You price each standard slide as $75 and $125/kino-level presentations, create a template for $500, and do some layout work for per page basis. This probably seems like productized services.
The idea of menu pricing is far better than trading time for money. This is 100% focused on tasks an deliverable. If you use this method, you can increase your profits and your fees by bundling these together in selling the business outcome.
Determining the Value
The way to determining the value of your product is by contacting your previous clients and asking them their value of the work you did for them in the past. You can then base your price on the worth they gave your output for your productized service that bundles some tiny deliverable-based menu pricing options.
If you don't have past clients, try to set few custom engagements just to get a feel of how much value your work probably be, and use it as your basis in setting up your price.
Dealing with New Clients
If you are working with a new client, you may want to use “White Conversation” with him and just forego the menu pricing. You simply have to present an ad hoc proposal.
Using the presentation services and per slide pricing as an example, you directly ask the client why does he need to pay you to create the presentation when he can do it himself instead of simply agreeing to being paid $100 per slide. The client gives you his reasons, and you continue asking why. This situation is just to point out that you can actually find an outcome that has dollars attached to it in the business context.
To hear the rest of The Difference Between Menu Pricing and Productized Services by Jonathan Stark, download and listen to the entire episode.
Reach out to Jonathan by following and tweeting her @jonathanstark. Don’t forget to let him know you heard about him on Devchat.tv’s iPhreaks podcast!
If you’re short on time, here are the highlights of The Difference Between Menu Pricing and Productized Services by Jonathan Stark:
Menu pricing equivalent to productized services? (00:26)
Determining the value of your deliverable? (02:11)
Working with a new client? (03:15)
How menu pricing and productized services are related? (06:36)
How productized service is in size compared to menu pricing? (07:43)