Value-Based Pricing Calculator

Value-Based Pricing: Charge What You Are Worth

Value-based pricing sets your price based on the measurable value you deliver to the client, not the hours you spend or your costs. If your work generates $500,000 in annual value, charging $50,000 (10% value capture) gives the client a 10x return on investment while earning you significantly more than hourly billing would.

The Value Capture Concept

Value capture is the percentage of the total value created that you charge for your services. Typical ranges are 5-25%. The exact percentage depends on your leverage, the client's alternatives, and the risk level. A lower capture percentage makes the deal easy for the client to approve; a higher percentage maximizes your revenue.

Risk Adjustment

Not all outcomes are guaranteed. Risk adjustment accounts for the probability that the projected value may not fully materialize. For proven, low-risk solutions, charge full price. For experimental or uncertain outcomes, discount the price to reflect the risk the client is taking.

How to Quantify Client Value

• Revenue increase — Will your work generate new sales or higher conversion rates?
• Cost savings — Will your solution reduce labor, materials, or operational costs?
• Time savings — Multiply hours saved by the client's internal hourly rate.
• Risk reduction — What is the cost of the problem you are preventing?

When Value-Based Pricing Works Best

Value-based pricing works when the outcome is measurable and meaningful to the client. It works poorly when the value is unclear, the scope is undefined, or the client does not understand or trust the value calculation. In those cases, start with a smaller engagement and build evidence.