The Ugly Truth About Value Based Pricing

There is a pricing concept called value based pricing that I think is wrong for 95% of filmmakers and videographers. Let me explain why. And then I’ll share with you what I do instead.

Here is the basic on value based pricing. You are trying to figure how much someone is willing to pay for your services. The way you go about it is by figuring out how much your video is worth to them.

Watch my YouTube video on the pricing model I use:

[antonyshadowbanned]

I can confidently say these are my favorite business videos on YT. No fluff, no motivational BS, straight practical knowledge. Can't express enough gratitude, Saj. I'm sure this is how many if not most of your viewers feel too.

[thevisualkidd]

Wow you're the YT mentor I never had and never knew I needed. Thanks for the great content!

[vanessamontezumaramos]

Value based pricing only works when you have good positioning and a brand. If you are starting is pointless and you should take what is coming to you to build a portfolio, then you can specialize. Only a few times in my life I was able to do VBP, and those where because I had something the client wanted and couldn't get anywhere else. Any other time, is project-based. That said, I do think one should try to go beyond the billable hour, and giving detailed cost estimates.

[DanielEarl]

I was never comfortable with saying I'll get you x customers. I can't garuantee that, and saying that kind of stuff could lead to legal problems.

[Robert.DeCorah]

THIS! I’ve had my business for 5 years now, and shortly after starting I learned of this pricing structure from a course. No matter how much I tried to implement it with clients, it never worked out the way they said it would. I always figured I sucked at sales.

Then I stumbled on another popular course and they took the same value based pricing structure, but then added how I have to be in charge of their funnel/ads/distribution/etc… to get results for the model to work. No matter how many times I tried, it never worked out as they said, and I kept beating myself up thinking I suck.

I’ve been doing 6 figure years for 4 of the 5 years I’ve had my company and I’ve felt like I suck on the business side because I could never charge based off value, even though I was charging killer project rates.

I feel like this is a topic that needs to be more widely discussed. The rhetoric that you must do this is really hurting people, and making people like me feel like my successful business is crap because I’m not maximizing profit, even though I’m still killing it. I don’t want to be a marketing agency, but feel like I have to, solely based on what everyone spews in all these courses.

Thanks for making this video.

[BertrandNathanaelJean]

This changed my whole perspective on value based pricing. I need you as a mentor.

[dentalphotographysensei]

Good info. All the other video guys say to do value price. This makes the most sense.

[alexandrucristian]

You should do a video where you sit together with Chris Do from @thefutur and seriously talk and give examples on how "Pricing based on value" work and can't work. I quite looking forward to that video.

[ruggedstone]

These videos are so good. Thank you for the mentorship along the way. I'm growing!
-Daniel

[pdlrkpdlrk]

Thank you so much Saj fpr clearing this up. I have recently paid alot of mpney for a course thats whole principal is about 'vbp' and it has never made sense. To be able to say you can garuntee leads or revenue margins doesnt even seem ethical of you know tou cant for sure. The more i eatch your videos the more i see your the only tutor i want to even have. Even just your youtube videos are more valuable than paid courses. Its much more straightforward offering a hreat marketing solution as you said and even if you had basic tiers of that it would be great. Everyone in the cousre also doesnt know what theyre doing the group calls are just people complaomomg that nothing is working.

Thanks for this im going to restratagise now.

[purs]

I thought I was going to disagree with this video but it is true. If you enact value based pricing you are no longer just a creative, you essentially have become a marketing agency. You need to understand marketing and business. A lot of people don't WANT to do that, hell a lot of us make videos to be creative usually because we don't enjoy the ''boring stuff''. Personally I actually do enjoy business and finance, (I'm in finance in my real job as I'm still only doing videography on the side) so value pricing model intrigues me and have recently started diving into it, after traditional pricing model for the last few years.

[MichaelDrowley]

I get it but the issue I think it doesn't address is leaving money on the table and that that reduces the value of the industry as a whole. When you start out you are happy to do videos for less but underquoting is not good long term. The best partnerships between creative and client is when the budget fits the cost plus margin model. I always ask the client questions about their budget to understand what they are expecting and willing to pay. Then I can decide if I will work for the money they are expecting to pay. I can try and increase value of the offering, but usually the best option is to say no thanks and search for a client who has a better/bigger budget.

[yfilms]

Thank Saj! I’ve seen these gurus (who used to sell crypto, seo, funnels, and other nonsense) jumping on the “videography” band wagon. They are giving terrible advice. Video Production is a real industry with real professionals who spend their lives perfecting their craft.

[itstartsmedia]

The GOLDEN TRUTH video! Funny is how after error and trial I got to this understanding myself some time ago, made it work, and now I see the confirmation in your words. Thanks Saj!

[DANAMIONLINE]

Good point about the challenges of value-based pricing with small business owners as you're starting out. As you implied in this video, people implementing value-based pricing must understand business. 

I want to add…you can still be creative, running a video production company while helping your client strategize on the distribution of your videos. 

Everyone must ask themselves what they are willing and interested in doing and recognize the trade-offs with both approaches.

I'm a creative that enjoys the side business and has adopted value-based pricing.

[michaelrbradley]

THANK YOU. I myself AM 29. Ha! I feel seen, and I can’t express how much I needed to hear this. I’ve been beating myself up for months trying to learn the marketing agency concepts, just to fit the value based model, and it’s liberating to hear from someone in your position to just let it GO. I’m a creative. I’m not a marketing expert by a LONG shot. At least not right now haha. Thank you.

[AdamSzarmack]

This hit home. I am currently in a situation where 3 years ago started a production company that I have grown and then turned into a full service marketing agency but we are still struggling with how to price our services.

[dreamxrsfilm]

Great perspective but I use value based pricing along with hundreds of other videographers in the community I’m a part of and it works.

This is why videographers will never make what they are worth, because they don’t understand the numbers. Once you have the creative done, learn the businesss side and get comfortable with understanding and asking about numbers.

[TonyCaseyIRL]

Great video, completely agree.
As you say, 10 years of doing a particular niche might give you a bit of credibility to ask those questions. By that stage, you should be a rock star in it.

[daveyerrington]

I recommend that you start to learn business in addition to your core skill. Also sales. You want to get to a point in your career where you're doing value-based pricing if you're handling a complete solution end to end just like Saj is talking about. There will come a day when your skills will peek and you won't be able to grow beyond working per hour and you will want to have better long-term security but also grow into new skills. It's totally ok to never go beyond keeping it simple too but having better late-career security and earning potential is dependent on what you're interests are and where you want to go.

I do very basic videos for my side business but my career has been as a software engineer and data scientist. I've learned a lot about running a business but also wear a few hats: Designer, web devleoper, backend engineer, NLP/LLMs, etc, etc. After 20+ years of working, I don't see why anyone at least at this stage of a career as me would keep doing hourly work exclusively. I take clients on hourly but I also target clients where value-based pricing makes the most sense. This allows me a lot more freedom and security than juggling 4-5 clients at once to maintain my security.