/ Opening

The visible output is not the full work being priced

A “simple” deliverable can contain discovery, senior judgment, coordination, revisions, production, QA, and risk.

SCOPE

What are we promising?

Deliverables, assumptions, exclusions, rounds, dependencies.

MODEL

How will payment work?

T&M, fixed, project, retainer, performance.

VALUE + RISK

Why this price?

Outcome, expertise, urgency, uncertainty, accountability.

TAKEAWAYPrice the work and risk actually being promised—not only the visible file or estimated hours.

/ Quick Test

Which price is correct?

The same strategy assignment can be sold under different conditions.

HOURS-ONLY

120 estimated hours
Blended rate
Price = time × rate

COMMERCIAL LOGIC

Scope and unknowns defined
Risk allocation explicit
Value and urgency considered
Change rules visible

TAKEAWAYHours are a cost input. They do not fully explain price or value.

/ Model

Build the commercial structure in order

The fee model should follow the work and uncertainty.

01Define scopeOutputs, process, owners, dependencies.

02Name uncertaintyWhat is known, variable, or client-controlled?

03Select modelAllocate time, performance, and scope risk.

04Set change rulesDecide how new information changes fee or promise.

TAKEAWAYA pricing model is also a risk and behavior model.

/ Distinctions

Commercial models distribute uncertainty differently

No structure is automatically client-friendly or agency-friendly.

TIME & MATERIALS

Client carries volume risk

Useful when scope is genuinely uncertain.

FIXED / PROJECT

Agency carries delivery risk

Requires assumptions and change control.

RETAINER

Both fund continuity and access

Requires capacity and priority rules.

PERFORMANCE

Agency shares outcome risk

Requires measurable causality and control.

TAKEAWAYUse performance compensation only when the agency can influence and measure the result responsibly.

/ Team Challenge

Price the same assignment three ways

A client wants a new go-to-market strategy in six weeks.

Clear scope; normal timingUnclear scope; high executive accessUrgent launch; major financial upsideOutcome depends on sales and product teams

FOR EACH: commercial model · assumptions · exclusions · risk owner · value drivers · change rule

TAKEAWAYThe best model makes the real uncertainty visible instead of hiding it in a number.

/ Pressure Test

What is the client actually buying?

Defend the price without apologizing for expertise or pretending hours do not matter.

1.What output and decision are promised?

2.What risk does each party carry?

3.What value comes from judgment, speed, or avoided error?

4.What condition would trigger a scope or fee change?

TAKEAWAYA strong commercial conversation explains the promise, risk, and value—not only the total.

/ Example

One assignment, three defensible models

The right structure depends on conditions.

MODELWHEN IT FITSPRIMARY RISK

T&MExploration and unknown volumeClient pays for actual effort

Fixed projectDefined output and assumptionsAgency manages delivery efficiency

RetainerOngoing decisions and accessBoth manage capacity and priority

Performance hybridMeasurable outcome with shared controlBoth share result and causality risk

TAKEAWAYDifferent models can be correct if the scope and risk logic are explicit.

/ Close

Scope protects the promise. Pricing allocates the risk.

Professional-service value includes output, experience, judgment, speed, and consequence.

DEFINEMake the promise explicit

ALLOCATEChoose who carries uncertainty

EXPLAINDefend the value clearly

TAKEAWAYDo not price a complex promise as if the client is buying only hours.