For most creative professionals, pricing our work is the most difficult and emotionally fraught part of running a business. We are often tempted to fall back on simple, industrial-age models: calculating our costs and adding a markup, or just picking an hourly rate. But these models are a trap. They are fundamentally unsuited for creative work, and they will sabotage your business in the long run.

The key to escaping this trap is a powerful mental shift. You must stop thinking about pricing as a reflection of your time or your cost. You must start thinking about it as a reflection of the value you create for your client.

The Problem with Trading Time for Money

When you charge for your services by the hour, you create a perverse incentive structure that punishes you for your own expertise. As you gain experience, you become more efficient. You can deliver a better result in less time. Under an hourly model, this means that the better you get at your job, the less money you make. It makes no logical sense.

An experienced performer might be able to custom-design a stunning, high-impact performance in a few hours, a task that might take a novice weeks of fumbling. Charging by the hour would mean the vastly superior service is priced lower. The model is broken because it measures the wrong thing. An elegant, professional, creative service is not a commodity, and its value is in the outcome, not the labor.

Value-Based Pricing: What Is the Outcome Worth?

Value-based pricing completely decouples your fee from the time it takes you to do the work. Instead, it anchors your price to the value of the outcome for your client.

A 45-minute performance at a corporate sales conference is not just 45 minutes of “entertainment.” What is the true value of that performance to the client? It’s a strategic tool to energize a sales team for the coming year. It’s a way to create a landmark memory that strengthens company culture. It’s an opportunity to make the attendees feel valued and rewarded. That outcome has a tangible, significant value to the company, and the price of the service should be a reflection of that high value, not a reflection of how long the performer is on the stage.

The Power of the Anchor and the Package

How you present your prices can dramatically affect how they are perceived by a client. Two psychological tools are essential here: anchoring and packaging.

Anchoring is the practice of leading with a high-end, premium option. In my case, this is the “Platinum Package.” By establishing this high anchor point first, the other packages seem more reasonable by comparison.

Packaging is the art of grouping your services into clear, easy-to-understand tiers. Instead of an à la carte menu of dozens of confusing options, you offer two or three clear packages at set project fees. This simplifies the decision for the client and makes them feel more confident in their choice.

This clear, confident pricing structure is a part of the elegant, professional client experience. It demonstrates that you understand your own value. So, stop charging for your time. Start charging for the value, the impact, and the transformation that you provide.

What is the true value of the outcome you create for your clients? And more importantly, does your pricing reflect it?

Internal Links: The Platinum Package: An Anatomy of a Premium Offering, The Power of the Non-Refundable Deposit: A Professional’s Best Friend

External Link: A fantastic primer on value-based pricing for freelancers from Jonathan Stark