Yesterday’s article left off with the question: how can you come up with a time and price estimate for the implementation phase of a Salesforce project?
The non-typical answer is: you don’t.
That is, you don’t estimate anything. Instead of the typical approach of
- Determining a level of effort (LOE)
- Mapping the LOE to an hourly amount
- Multiplying that amount by an hourly rate
- Adding a 15% buffer
- Crossing your fingers and submitting your proposal
Here’s the non-typical approach:
- Having a conversation with your client about their business goals
- Asking them what their definition of what success looks like
- Determining the value of the project to the client
- Submitting a proposal based on the value you are bringing
This is called value-based pricing (VBP), and it’s a completely different mindset than hourly billing.
You’re essentially setting your price based on how much value you are providing.
The takeaway
It takes some time to fully understand and adopt VBP. Heck, the first time I heard of it, I thought it was some kind of scam. It took a few months to warm up to the idea and I haven’t charged by the hour since then.
If this is the first time you’ve heard of it, you can read more about it here: https://thegoodenoughconsultant.com/archive/tag/fixed-pricing/