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The Power of Pricing Options

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Pricing. A topic we discuss a lot at Finally CPA, and for good reason.

Your pricing strategy is important and even small improvements to your approach could significantly increase your firm’s profitability.

This is particularly true for creative businesses.

And while previous blog posts have detailed strategies for pricing creativity, this post will unlock the power of pricing options.

Typically speaking, a pricing options approach involves presenting a proposal to a client with three options- a Safe Bet, the Optimal Option, and an Expensive Option.

The Safe Bet: this option provides your client exactly what they asked for in the brief, no more, no less.

The Optimal Option: in the Optimal Option, you meet all the requirements as set out by the client in the brief, but provide value added features that are worth the upgrade.

The Expensive Option: this is the goal. In this option, you put your experience to work to exceed the client’s expectations and intrigue them enough that it is possible that they will select this proposal.

This strategy works really well in creative firms where what the client wants is subjective. For example, imagine a client engages you to design their forever home.  They share an idea board with you and you work with them to come up with a list of must have and nice to have features. They confirm their target budget with you.

This is a perfect opportunity to use an option pricing strategy with your client.  One concept must be within their target budget and mostly deliver on their must have list.  Another concept might include both their must have and nice to have features. And the third concept would include everything they wished for plus things they didn’t even know they wanted.

Each option would carry a different budget appropriate for the scope of work presented.

Pricing options are a way to ensure that you’ll get the business at your optimal rates, clarify to the client what they are (and aren’t getting) and dramatically increase the likelihood of growing the size of the contract.

Has your firm used pricing options successfully? If you haven’t used them before, why don’t you try it with your next proposal?