There is so much information about your service in your fees. Think of it, your pricing determines the type of clients attracted — size of organization, professionalism, investing or cost-cutting, quality-conscious or quantity-driven. Your pricing is also an indicator to any interested buyer about your level of service, expertise and experience, prior to buying. Think about it, does the lowest bidder instill confidence? The old adage that you get what you pay for holds true.
There is no right or wrong in determining which pricing model works best for you. Personally, I am gravitating towards serring a value-based service fee whenever possible. If, however, your service is part of a larger, overarching, project or programme at your client’s organization and the actual duration and resources required cannot be easily determined, you may be asked to provide a cost breakdown by time and resources. This is often the case for annual maintenance contracts or software development projects.
In those cases, your service is a commodity and a mix of cost-based pricing and competition or market-based pricing is more optimal. Typically ally this is the model many agencies and consulting companies are using.