Scheduling and Capacity Planning with Value Pricing
One of the biggest challenges I’ve found with value pricing projects is scheduling my work and capacity planning for the future.
Without the constraints on time, some projects have dragged. Projects running on and on are nothing new, but it does make things extremely difficult when trying to schedule future work or bring new projects on board.
Perhaps the most most obvious way to resolve this is to time-box work. However, my worry is that by putting an artificial time-limit back on the scope, it will be all too easy to fall back into some form of time-based billing.
I’ve recently had success selling sprints purely based on scope — customers love the safety that the price won’t change, as it is based on the value of the sprint. So whilst weekly billing seems to be the simplest answer, I’m obviously reluctant to go down this route.
However, I’ve begun to realise there’s perhaps a bigger takeaway.
Value pricing is forcing me to completely rethink what my business does.
Those generic development services (“programmer for hire”) are now getting in the way of growing my business.
This realisation probably started when I introduced Service Plans, which have been great for me and my customers. They offer a known scope of work for a known monthly price.
The majority of my Service Plans customers have no time restrictions, but are instead restricted on the scope of work that’s included. Lower-tier plans might include monitoring and maintenance, security patches, etc., whilst higher plans include new feature development, consulting, R&D, and so on.
Service Plans are designed for the modern apps, whose environment changes every day (OS upgrades, security patches, user feedback, bugs, changing APIs, etc.)
However, there’s still much more I can do in this area.
Moving to Productised Services
With this in mind, I’ve begun reducing the number of “traditional” or ad-hoc development projects I’ve taken on, and have concentrated on the Service Plans.
As I’ve learned more about my customers’ needs, I’ve begun to identify common requirements which can be packaged into fixed-price, fixed-scope “productised services”.
Productised services and value pricing seem to go hand-in-hand. In the coming days, I’ll be publishing a new site detailing the first set of services.
Early Productised Services Landing Page — Coming Soon!
With known scope and pre-defined outcomes, I hope to be able to schedule work more confidently, and offer a far more solid value proposition to new and existing customers. The monthly Service Plans will continue to be the main focus, but over time I hope to refine what’s included in the plans (beyond the code) to offer even more value to customers.
Have you started using value pricing in your business? Do you get hit with the fear when asked to give a price? I’d love to hear how you’re conquering those fears and using value pricing in your business. Let me know by getting in touch.