Tim Bouchard PRO
Owner & CEO at Luminus, a creative digital marketing agency located in downtown Buffalo, NY.
Golden Mean Pricing
@TimBouchard
slides.com/timbouchard/golden-mean-pricing
EMPLOYEE
2007-2008
FREELANCER
2008-2009
PARTNER
2010-Forever
Modern Imagination
Sharpcut Media
LUMINUS
Who's Determining Project Pricing?
BUSINESS
DEVELOPERS
BUSINESS
OWNERS
FREELANCERS
10% OF WORKERS
CLAIMED
SELF-EMPLOYED
April 2016 - US Bureau of Labor
By 2020 nearly 40% of the workforce will be self-employed
Intuit 2020 Report
PRICING
DEFINED
"Payment for time spent performing excellent services"
- Creative Service Provider
VALUE = TIME
"Payment for A DESIRED PRODUCT OR RESULT"
- Potential Client
VALUE = PRODUCT
What causes the difference?
Unpredictability of Creative Projects
Familiarity with Project Management Tasks
Perception of the Industry
ANATOMY OF A CREATIVE PROJECT
OBJECTIVES
What we're supposed to deliver
EXECUTION
The work involved to accomplish objectives
WORKFORCE
The team (or individual) tasked with executing
TIMELINE
The time spent on executing work
PROJECT MANAGEMENT
The time spent orchestrating the team and client
OVERHEAD
Services, Software, Facilities supporting all the prior tasks
SO HOW SHOULD WE PRICE OUR WORK?
HOURLY PRICING
PROS
Protects the value of time spent working
Maintains accountability
CONS
Can be hard to predict project cost
Hard to sell appearing "endless" to the client
FOR
Short term projects
Long term projects with fluctuating task lists
VALUE BASED PRICING
PROS
Easy for client to understand fixed cost
Sets a goal for time to spend on the project
CONS
Can be easy to underestimate a bid
Can result in lower tier work retaining higher tier expectations
FOR
Flat rate quotes for medium projects
Tier based options for larger projects
COLLABORATIVE PRICING
PROS
Allows billing flexibility
Allows transparency and client participation
CONS
Success mostly limited to large budget / long term relationship agreements
FOR
Long term projects with varying milestone timelines
But WHAT IF ThEY COULD BE BLENDED TOGETHER?
ENTER
Golden Mean Pricing
Golden Mean?
“the desirable middle between two extremes, one of excess and the other of deficiency” - Aristotle
What is a
THE PURPOSE
Calculate an accurate estimate range
Include flexibility for tailoring project scope to budget
Easy to understand flat-rate quote
HOURLY FLOOR
Traditional estimate of how long work will take to complete
Add 15% for contingency
VALUE BASED CEILING
Full comprehensive solution along with supporting services
Will push slightly above client budget
NATURAL
GOLDEN MEAN
The calculated median between the floor and ceiling
THE
GOLDEN MEAN
The +/- 25% to +/- 75% relative range within the two extremes
Defines the client's window of comfort encouraging a successful sale
Offers a financial scale to tailor project scope within
Golden Mean range too narrow?
Could be an accurate estimate!
Is your hourly rate is too high?
Have you learned enough about the client needs to value price?
HOURLY PRICE ESTIMATE TOO HIGH?
Hourly rate too high?
Over estimating time pre-project?
Are you working efficiently?
USING GOLDEN MEAN PRICING TO STRENGTHEN THE SALES PROCESS
ALWAYS ASK FOR BUDGET
LEARN CLIENT NEEDS BEYOND PROJECT SCOPE
DEVELOP A
COMPREHENSIVE
STRAGY
BE OPEN TO NEGOTIATION
HOW GOLDEN MEAN PRICING CAN BE SUCCeSSFUL FOR YOU
Defines the minimum value of your work
Provides a mutually agreeable flat-rate quote for the client
Aligns deliverables and objectives within the budget
Puts you in the client's corner
A pricing model that grows with you
Try
Golden Mean Pricing
YOURSELF!
Send me your feedback @TimBouchard
slides.com/timbouchard/golden-mean-pricing
SLIDES
luminusmedia.com/golden-mean-pricing
FREE EBOOK & EXCEL TOOL
Golden Mean Pricing
By Tim Bouchard
Golden Mean Pricing
I will help you to understand the thought process behind Golden Mean Pricing by taking you through the common pricing struggles creative professionals face, how the anatomy of a project affects price, what other models out there have contributed to Golden Mean Pricing, and how to implement Golden Mean Pricing yourself.
