Pricing Strategy

Pricing Strategy is the answer to the question “where does the figure in the price list come from?” Three basic methods: cost-plus (cost + margin), competitive (like competitors ± a little), value-based (how much the client is willing to pay for the result). Most companies in the CIS are stuck with cost-plus because it is considered easier, and not because it works better.

Value-based pricing is the only one that scales without a ceiling. If my client earns 2 million from the campaign I run, then “my cost + 30%” is a gift, not a business. I switched to value-based consulting three years ago and will not go back: the conversation with the client immediately goes into the zone of “what result do we need”, and not “why is it so expensive”.

Competitive pricing is a trap for the nervous. You react to other people's decisions, rather than build your own logic. If a competitor lowered their price, did you too? What if he picked it up? This is a race to the bottom disguised as “market analytics.” The only case when competitive pricing is justified is entering a new market in order to capture a share, and then only temporarily.