Behind the Scenes of an IMPACT Based Pricing Transition

An Owner/CEO like you called me and said “Susan, I want to adopt IMPACT Based Pricing. How do I get started?”

My reply: “IMPACT Based Pricing (IBP) requires you to replace other pricing models you’re used to.  It requires repetition over time. Are you prepared to do that?”


Here’s what we did.

IBP is a mindset first—we deserve to be paid for the life changing differences we deliver—and a pricing practice second.

Three beliefs to overcome:

  • Time is money.
    • Time may be used to generate money but is not money itself.
  • Clients want to know exactly what you will do for them—your tasks and inputs.
    • Clients want to know exactly how you will change their lives—the IMPACTs
  • Because you are the expert, you are the one to determine how you will change their lives.
    • Clients are the only ones who can determine the life changing differences they want

The transition is more art than science

The firm uses its recent prices and fees as a starting point. We’re assuming that these fees are at least covering expenses (including Owner’s market rate compensation.)

You will extrapolate from recent client engagements:

  • IMPACT delivered
  • Significance of that IMPACT
  • If fees are/are not proportional to the IMPACT+Significance

Follow these steps:

  • List 7 recent engagements by name or another identifier. Right next to the name write a word or two that describes the IMPACT you delivered.
  • Next to that assign a significance number from 1-10.
  • Next, write down the fee you earned from that engagement.
  • Start a new list. Write the engagements down in order of fees paid, from lowest to highest.
  • Next to that column write the significance number you assigned to that engagement.
  • Circle any engagements where the fee and the significance number are not aligned. That is, the significance number is 9 but the fee is among the lowest.

You now see in black and white how your fees reflect—or don’t reflect—the IMPACTs you deliver to clients.

You will use this exercise as the reference for your early IBP offers.

No offer should be less than the ones on this list, and any that are of higher significance would be paired with higher fees.

Improve your discovery

The key to increasing your confidence and alignment is investing heavily in your interview/discovery/getting-to-know-you conversations.

Ensure that you get better at eliciting IMPACTs from prospects and clients using the Issue Chart and the Continuum of IMPACT. Practice turning those IMPACTs into the 3 options of the Choice Framework.

Document progress

After 6 months of IBP, it’s time to look at the following:

  • Have your fees increased as the IMPACTs you offer are greater with more significance?
  • Are your 3 options accurately and effectively capturing the IMPACTs prospects talk about? Did you price them accordingly?
  • Are there IMPACTs you no longer want to deliver because 1) they don’t reflect your ever growing accumulation of knowledge and expertise and 2) they take away from your capacity to deliver greater IMPACTs to others?

Celebrate your first 6 months

Check your P&L so you can see your revenue and your net profit. These should be greater than the previous 6 months.

Another measure of progress is the number of clients. If you are effectively capturing IMPACTs and delivering them for proportional fees, your number of clients may decrease while revenue stays the same or increases. This is one of the goals of IBP: use your highest level of expertise and knowledge for people who want IMPACTs that depend on that higher level. Your floor should regularly get higher.

Also consider your workload and that of your associates. I’m not telling you to track time (get rid of time sheets!) but rather to discuss the sense among your staff of how their workload has changed.

Changes will include typical workday hours; meetings; phone calls and emails from clients, the behind the scenes work required to deliver IMPACTs, and time for personal life.

Expect setbacks

You’ll experience some setbacks and glitches along the way. That is to be expected, just like any time you learn a new skill.

My clients have experienced things such as:

  • Underestimating the impact and therefore the fee
  • Overestimating the impact, making your fees too high and having the client reject all your options
  • Feeling stuck as you’re writing your 3 options for the Choice Framework. Sometimes it’s hard to differentiate between IMPACT PLUS, IMPACT, and IMPACT Light.
  • Falling back into your old habits because you’re tired, stressed, or short on time. The key is to let that one go and get back on the IBP track with the next one.
  • Frustrated that writing your offers (proposals) is taking longer than they used to. This will abate with practice and a good template.


I hope these steps give your clarity about making the transition to IMPACT Based Pricing.

  • My clients have experienced about a 90% acceptance rate of one of their offers.
  • They have increased fees and net profit by 25% and more.
  • They have reduced the number of entry level clients and increased the number of clients that require their most advanced and complex work.

If you’d like to also enjoy some of these results, let me know.

Text IBP to 703-801-0345.

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