Embracing Outcome-Based Pricing and Ditching Hourly Billing with Jonathan Stark

Embracing Outcome-Based Pricing and Ditching Hourly Billing with Jonathan Stark


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Summary:
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Jonathan Stark is a former software developer who is on a mission to rid the world of hourly billing. He is the author of Hourly Billing Is Nuts, the host of Ditching Hourly, and writes a daily newsletter on pricing for independent professionals.

In this episode, Jonathan highlights the drawbacks of billing hourly which can reduce your value to just a commodity. Instead, he suggests pricing your services based on the outcome you deliver, thereby providing maximum value to your clients.


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Why you have to check out today’s podcast:
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- Discover the top reasons behind the shift away from hourly billing
- Find out the advantages of choosing outcome-based pricing over hourly billing
- Uncover why positioning your service effectively can have a significant impact on your pricing strategy


"Positioning is critically important for any kind of upward lift on your fees."
- Jonathan Stark


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Topics Covered:
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01:04 - What got him into pricing

03:35 - The problem with having an hourly rate

06:11 - Pricing uncertainty in the case of a car diagnostic

08:45 - What makes it better charging fixed price upfront

10:33 - Why positioning your service is crucial in pricing

12:59 - What hourly rate appears to be on the label

16:15 - Touching on the 'Experience Economy' [pricing transformation]

19:06 - Formula for value or the maximum price

21:36 - The best reason to not use hourly prices

24:22 - Solving the scope problem with knowing the desired goal

29:21 - Jonathan’s pricing advice

30:38 - How to connect with Jonathan


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Key Takeaways:
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"If you sell somebody an hour, you cannot make it more efficient. It takes an hour to deliver it. It artificially limits your income." - Jonathan Stark

“The way I do it [on the scope problem], I don’t scope first, I scope last.” - Jonathan Stark


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People/Resources Mentioned:
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- Alan Weiss: https://alanweiss.com/about-alan-weiss/
- Joseph Pines: https://strategichorizons.com/pine-an...
- How to Measure Anything: Finding the Value of Intangibles in Business by Douglas Hubbard: https://www.amazon.com/How-Measure-An...


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Connect with Jonathan Stark:
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- Website: https://jonathanstark.com/

 
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Connect with Mark Stiving:
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- Email: [email protected]
- LinkedIn:   / stiving  
- Twitter: https://twitter.com/markstiving?lang=en


VISIT THE IMPACT PRICING PODCAST for Full Show Notes and Resources:
http://podcast.impactpricing.com/