How Value-Based Pricing Transformed a Creative Agency
A Cycle of Billing for Time
Across the Pond wasn't struggling but our traditional time-based pricing model was a ceiling on our growth. Stuck in the cycle of billing for time and adding mark-ups, we couldn’t see an alternative path to more revenue and profit for our (then) video agency.
A Radical New Direction
In 2017, we embraced a radical new direction: value-based pricing. Inspired by Blair Enns' "The Win Without Pitching Manifesto" and "Pricing Creativity," we ditched the hours-and-minutes billing and started offering clients a choice. Every proposal came with three distinct options, to reflect the tangible value delivered.
Cultural Shift
This wasn't just about a price hike. It was a cultural shift. Budget breakdowns became a thing of the past; the focus pivoted to unearthing the client's core objectives. At Across the Pond we stopped jumping to solutions and instead honed our skills at diagnosing problems and understanding what was really at the heart of the client’s request. Armed with those insights, we developed three pricing tiers explicitly tied to the value their expertise could create.
Dramatic Impact
The impact was swift and dramatic. Simple promotional reels evolved into comprehensive advertising campaigns. Last-minute rushes commanded premium pricing. Clients were actually paying us for our strategic and creative thinking.
Within one year, Across the Pond's revenue had surged by $1 million - revenue we would never have captured under our former model.
This story highlights the importance of prioritising client needs, understanding their goals, and getting rewarded for the value that you deliver.
Aaron was Global Managing Director at Across the Pond between 2018 and 2023
Highlights:
• Adopted new sales frameworks
• Introduced value-based pricing strategies
• Offered options
• Diagnosis before prescription
Results:
• $1,000,000 in new revenue
• Agency culture shift
• Internal appreciation of expertise and value
Inspired to create similar growth for your creative business?
Get in touch to talk about how new pricing models can change your direction.