Practical Sales Training™ > How To Convert > Results Based Pricing
Results Based Pricing
What Is It?
Charging for time caps how much you can ever earn. Charging for the result instead changes everything. Your buyer only pays once they actually get what they wanted. That feels fair to both sides.
Why Does It Work?
It works for three clear reasons.
Limitation Of Risk
Your buyer only wants to pay for the result they need, not an arbitrary amount of your time. Charging for results makes that possible.
Likelihood Of Success
If your fee depends on the result you deliver, it signals something important. It shows you’re capable of getting there. This also proves you’re genuinely incentivised to do your best work.
Fewer Negotiations
Hourly pricing gives buyers an easy way to negotiate you down. But once your fee varies with the result, they lose that lever entirely. There’s no hourly rate left to haggle over.
How Can You Use It?
This suits service based businesses especially well. Do the maths first. You need to survive periods where you don’t get paid for missing results. Once you can sustain that risk, settle on a structure. It should reflect the true value of your work.
When It Works Best
This works best when your results are genuinely measurable and directly tied to your effort. It also helps when buyers already distrust hourly billing in your industry.
When It Becomes Dangerous
This becomes risky if your results depend heavily on factors outside your control. Then you carry all the downside while barely influencing the outcome yourself.
Common Mistakes
Not Doing The Maths First
Don’t set a results based fee without running the numbers first. Going unpaid during a slow patch can sink a business fast.
Pricing On What You Can’t Control
Never agree to results based pricing on results you can’t actually influence. If the outcome depends mostly on the buyer, or on luck, that’s a problem. The risk sits on the wrong side.
Results Based Pricing – An Example
Estate agents charge a percentage of the property price for their service. So you only pay when the property sells. The amount depends on the value of your home.
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