“What is a cynic? A man who knows the price of everything and the value of nothing.” Oscar Wilde

“The price of anything is the amount of life you exchange for it.” Henry David Thoreau

Scott is primarily a value-driven consumer. He appreciates the great taste of certain brands and is willing to pay more for them. Me? Price-driven, all the way. I’ll always choose price over flavor, garnering complaints from my family about my cooking. So I understand the price-driven customer.

But as a business owner, I know that low-balling projects is usually bad for business — on both sides of the invoice. Aldo Gucci said, and rightly so, “The bitterness of poor quality is remembered long after the sweetness of low price has faded from memory.” I’ve experienced that bitter taste myself, most recently in the horror of discovering — too late — that the bed sheets in my deeply-discounted motel room hadn’t been washed.

Over the last decade, I’ve been a part of behind-the-scenes discussions as New England Multimedia has gone from project-based pricing to hourly pricing, to a mix of the two pricing structures, depending on the client’s needs, perceptions, and goals.

While one customer understands the concept of project-based pricing, another will ask, “How long will that take?” and expect the cost to be justified with an hourly breakdown.

Throughout those years, we’ve learned a lot about the word “value,” specifically as it relates to the perception a customer has of the importance of a product or service. In a nutshell, if the client doesn’t see his or her website, video, or search engine optimization strategy as vital and valuable to the realization of his or her marketing goals, the relationship is going to be a difficult one when it comes to pricing.

Tony Robbins tells a famous story about a technician who charged a FedEx CEO $10,000 to turn a screw that got that facility’s conveyor belts running again after a breakdown. The CEO was flabbergasted at the price and asked for an itemized breakdown.

The tech wrote on a napkin: “Turning Screw $1, Knowing Which Screw to Turn $9999.”

Over the last couple of years, we’ve spoken to other New England-based businesses including web, internet marketing, and video production professionals to find out how they price their services and products, and this is what we’ve heard from some who’ve been in business for years:

Internet Marketer: “If the customer doesn’t see the value of what we’re able to do for them, the partnership is going to be a difficult one and won’t be worth it.”

Web Developer/SEO Professional: “I won’t work with uneducated clients, because I have to expend too much time trying to convince them of my worth.”

Programmer: “We won’t even talk to customers who have less than $25,000 to spend on a website. The smaller budgets will nickel-and-dime you to death.”

Photographer: “The fact that it takes me 5 minutes to touch up a photo has no bearing on price. It’s value. The value of my talent and expertise. If they want to spend years learning my craft, let them.”

Providers: How do you price your services? Hourly? Project? Mix? Which do your clients seem to prefer?

Customers: Are you more value- or price-driven? Do you believe the price of a project or service should be based on the amount of time it takes to produce it?