Understand Your Buyer > How To Convert >Results Based Pricing

What is it?

When it comes to charging for your work, charging for time can limit your potential. Charging for the results you obtain rather then simply the “cost” of just your time means your buyer will only really pay when they get what they want which is a fair setup.

Why does it work?

It works for three reasons:

1 – Limitation of risk. Your buyer only wants to pay for the result they need, not pay arbitrarily for your time. Charging for results enables this to happen.

2 – Likelihood of success. If what you charge is based on the result you obtain then it implies you are capable of achieving the result / are incentivised to do the best work possible.

3 – It reduces negotiations. If you charge by the hour for your work, it’s easy for buyers to negotiate and commodotise your worth. If you charge for the result and it varies – they can no longer make this link to your time and use it as a bargaining chip.

How can you use it?

This works for service based businesses primarily. You need to do the maths to make sure you can afford to not get paid if you don’t achieve results for buyers, but if you can obtain ongoing results then it’s just a case of settling on a pricing structure that reflects the true value of the work you do.

6 different ways to structure payment for your offering:

Pay now start later-Allow buyers to secure something but not take delivery or use it until later when they are ready.
Pay on results -Take payment when you have delivered the desired result for your buyer
Pay as you go – Allow buyers to pay as they consume your offering.
Prepayment Allow buyers to create a credit balance that they can then draw down.
Buy now pay later – Allow buyers to “buy|” today but not actually pay for the item until later in the future.
Finance – offer finance and instalment payments to ease cashflow for your buyer.

Results Based Pricing

6 different ways to structure payment for your offering:

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