Your Price is not your Value

Let me start by saying it loud and clear for the people in the back: I despise being paid for my time.

I’m not here to be a movie extra: paid just to stand around in the background. I’m here to deliver results. And it’s time we stopped pretending that time equals value.

Courtesy of WIX

For consultants, it is absolutely standard to charge by the hour (or day, depending on the project). Time-and-material (T&M) pricing, it’s called. Seems fair, right? You get paid for the amount of work you put in. Well… fair for whom exactly? Over time, this assumed equality between the price per unit of work and the value you deliver (i.e., price you charge = your value) means that you are being paid simply to be present, not to be transformational. Are you at work? Cool, here’s your hourly rate. But have you actually brought any value during that time at work? Yeah, we don’t talk about that.

Clients want to measure deliverables, not hours. And frankly, so do I.

T&M is the consulting world’s equivalent of paying for gym equipment by the minute. It tracks inputs, not outcomes. If I finish a game-changing strategy in a day, should I earn less than someone who dragged it out over a month? Absolutely not.

But is there an alternative here? Yes: value-based pricing. That means pricing work based on the impact it delivers: helping a client enter a new market, solve a million-euro operational bottleneck, or design an offering that triples their margin. That’s what they value. And that's what you price against. Why?

Because price does not equal value.

So, whether you're a founder, a CEO, or simply someone who’s ever tried to charge money for something, remember this: what you think you're worth isn't what you're actually worth. The market doesn’t care how many hours you put in. Value isn't measured in effort. It's measured in impact.

The Mirage of Price

Price is a number. It's printed on invoices, whispered during negotiations, and adjusted in Excel sheets. It’s also a trap.

Too many businesses confuse price with value, believing that a higher price automatically reflects greater impact, or that lower prices will drive customer loyalty. Both are wrong.

Let’s set the record straight: Price is what you charge. Value is what your consumers get (that’s a Warren Buffett quote for you). One lives on your P&L, the other in your customer's head.

Value vs. Cost-Based Pricing: The Strategic Fork in the Road

Cost-based pricing is like dressing for the weather 10 years ago: it may have worked then, but it ignores where the climate (or market) is going. It calculates your price by adding a markup to your costs. Safe? Maybe. Smart? Not anymore.

Here's how it works: you list all your fixed and variable costs, allocate them per unit (e.g., per hour, per product, per license), and then add a profit margin. That gives you your minimum viable price: the lowest bar. Anything below this and you’re losing money. Cost-based pricing is good for ensuring you're not undercutting yourself. It’s a vital internal check. But it won’t bring you growth. It ensures survival, not success.

Value-based pricing flips the logic.

Instead of asking “What do we need to make a margin?”, it asks:

• What’s this worth to the customer?

• What outcomes do they actually care about?

• What would success be worth to them?

  
  

And charges accordingly. This approach is rooted in external perception rather than internal accounting. It involves understanding:

• The specific outcomes your customer is aiming for

• The financial or strategic impact of achieving those outcomes

• The alternatives they have (and what those cost)

• The emotional weight behind their decision-making (trust, urgency, brand affinity)

  
  

Once you've built this insight, you craft your pricing around the impact you create, not the hours you put in. That is why value-based pricing often includes tiered options, ROI-based models, or pricing tied to customer success. It attempts to categorize the levels of impact an offering promises, and charges accordingly in line with measurable outcomes.

How do you know if you got it right? Start by asking:

• Did the customer say yes quickly? You might be underpriced.

• Are they pushing back aggressively? You might be missing your value narrative.

• Are they returning, referring, renewing? Then your price likely matches your perceived value.

  
  

Modern sales organizations often use the same logic: value-based pricing, mapping prices to the buyer’s journey, and tailoring offers to what customers actually value. In short, your margins go up when your customers feel like they’re winning.

The Cost Structure Trap (And How to Actually Use It)

All this being said, many leaders nowadays still price based on internal cost structures. Unless you're a manufacturer selling commoditized widgets, that mindset belongs in a spreadsheet, not your go-to-market strategy. Why is that? Here’s where it gets operational.

Let’s break it down:

Fixed Costs are the expenses that don't change with your sales volume. Think of:

• Office rent

• Full-time employee salaries

• Software subscriptions

• Insurance and equipment leases

These are your "keep the lights on" costs. They stay the same whether you sell 10 units or 10,000.

Variable Costs are the ones that do change with sales. Examples include:

• Raw materials

• Freelancer hours

• Shipping & fulfillment fees

• Commissions or transaction fees

These scale up and down with your business activity. Together, fixed and variable costs give you the total cost of doing business.

To make cost-based pricing work, you:

1. Add up your total monthly fixed costs

2. Estimate your average monthly variable costs per unit

3. Decide on your expected number of units sold

4. Divide your total costs by that number to get your cost per unit

5. Add a margin (say, 20–30%) to cover risk, buffer, and keep the lights on

Voilà, that’s your baseline price. Drop below that and you’re not just discounting, you’re donating.

But here’s the kicker: that number is the floor, not the ceiling. It keeps you afloat. It won’t make you fly. If cost-based pricing keeps you in business, value-based pricing is what grows the business.

You don't get paid for how long you show up. You get paid for what happens because you showed up.

Whether you’re selling shampoo or software, what your product does is only half the equation. The other half is what your customer believes it does.

Consider this: two phones. Same hardware. One sells for $999, the other for $399. Why? Brand, trust, perceived status, aftercare, UX. These are value drivers (most of them intangible).

What people are willing to pay for evolves with time, context, and emotion. Your job is to stay ahead of that curve and articulate your value in terms that matter to them.

Visionary CEOs Look Beyond the Tag

Here’s the uncomfortable truth: if you’re obsessing over price, you’re probably under-delivering on value.

Price is a short-term tactic. Value is a long-term strategy. Visionary leaders don’t ask, “What can I charge?” They ask, “What can I change?”

They know that:

• Profitability doesn’t equal impact

• Revenue doesn’t equal relevance

• Pricing isn’t math, it’s psychology, storytelling, positioning, and customer intimacy

Or, to borrow a mindset from Simon Sinek: People don’t buy what you do; they buy why you do it. And they pay for what it means to them.

So if you want to build a company that matters, stop trying to sell your hours or justify your markup. Start asking: What change do we create? Who cares? And what are they willing to pay for that change, over and over again?

Because in the end, your price isn’t your value.

But your value? That’s your legacy.