As a hands-on consultant, I'm often asked: "How much time are you going to spend working with us?"
This made me realize some clients are more interested in how much time you spend working for them, rather than the work itself.
But as a business owner, shouldn't you be more interested in the outcome of the work instead of billable hours?
Especially in our times where – if you know what you're doing — AI can help you achieve the same outcomes in a fraction of the time.
This is why I transitioned to Outcome-Based Pricing.
And why I believe it's a win-win for both founders AND consultants.
1. **Value Over Hours**: What my clients truly value isn’t the time I put in, but the tangible results they get. Shifting to outcome-based pricing meant my work’s output became the focal point, not the hours clocked.
2. **Clearer Expectations**: All you need to do is agree on outputs and outcomes they're looking to drive, and by when you'll deliver them. By defining what good and great looks like, I can set better expectations that make both parties more accountable.
3. **AI Productivity**: Using AI, I found myself achieving outcomes A LOT faster, servicing more clients at once and with overall higher quality. Hourly models paradoxically penalize these efficiencies, showing how they're fundamentally misaligned with today's landscape.
4. **Deeper Engagements**: When you consistently deliver positive outcomes, your client relationships shift from a transactional dynamic based on time sheets to a partnership made of shared case studies. This incentives alignment opens doors to longer, deeper relationships.
5. **Premium Expertise**: Transitioning to outcome-based pricing was also a nod to my skills and expertise. It underscored my ability to deliver high-impact results regardless of input time, validating the premium of my commitment and knowledge offered to my clients.
Embracing outcome-based pricing aligned my business model with what my clients value the most — high-quality outcomes — AND the evolving landscape, where you can leverage AI not just for efficiency gains, but as a value-added skill.
I'm aware outcome-based pricing applies mostly to hands-on consulting and fractional engagements, and less so on hands-off advisory or leadership interim roles. For those, equity compensation might be best to align incentives — but that's a story for another day.
For fellow consultants considering this shift, I can say it’s not just a change in billing — it’s a step towards recognizing and maximizing your true value.
How are you pricing yourself? And how are your clients reacting when you're mentioning outcome-based pricing?
I'd love to know your experience. Let me know in the comments.