Valuing the created

In our training and consultancy proposals, Damaris and I experiment with different ways of valuing what we create. Currently, value creation afterwards based on a minimum and maximum price is under our exploration. I’d like to share our experiences so far.

 

Why?

In our transaction based economy there are always at least two parties involved in each transaction. One party offers what the other party needs, this offer and the need has a certain value for either party. We usually value this based on a monetary price that may or may not be negotiated. The price is not necessarily based on the real value that is created or the real costs that are made, other less transparent elements like scarcity, power relations, marketing and availability play an important role. In fact, valuation in itself is one of the most intransparent aspects of our economy as we know it today. Interesting to shed some light on this as the transition to a sustainable economy demands new ways of valuation.

With value creation afterwards based on a minimum and maximum price, we aim at contributing to the search to new ways of valuing the created value. When the relation accepts our proposal, it accepts the minimum price. The minimum price is the price that we feel is worth sharing our expertise and experiences and also covers basic costs we make. The maximum price represents for us a well-paid and sufficient income, which is based on the income distribution that suits new ways of organising our society and allows us to offer the same services to less fortunate relations as well.

After the execution of the proposal, it is up to our relation to determine what the actual value is of what we created and shared. We trust that our relation can make the necessary consideration to come to a price that represents the created value. An additional question we ask our relation: ‘What is it worth that we can continue our work and continue sharing new thinking and new ways of working that contribute to an economy that is sustainable and good for all?’

 

What are our experiences so far?

Not so long ago we executed an evening programme of three modules for private people in Amersfoort, the Netherlands. The experiment worked out well, the three sessions together were valued with a significant top up, that doubled our income for the evening sessions. Nevertheless, we received different feedback on our pricing system. Some people commented that the maximum could have been higher. Others did not agree with the minimum, they argued that if you do this the pricing should be entirely open and there should not be a minimum at all. However, how we look at it now is that we like to share the risks of costs together with the ‘client’. There is, after all, a demand in advance for our services that are worth a minimum.

Our first experiment with business went extremely well. We got the maximum price we had offered. However this was a small and flexible company where our pricing method was easily digested.

In both cases the result was that we felt really valued by our clients. We were even more happy then we were already because of this ‘freely determined value’ that resembled our added value for them. We felt honoured for what we did.

Our experiment is more challenging in larger business environments where budgets seem to have priority over value creation. Budgets are determined beforehand at different departments, the created value afterwards. So at one instance, our relation determined the price and reserved a certain budget prior to our services. Nevertheless still a valuable value creation, in the sense that the relation has to consider how much the process is worth. The downside is that it does not represent the value that we created.

 

Although this may not be the entire result we aimed at, we will continue our experiment. We want to put in practice what we preach. And we expose our relations to new ways of doing business that we regard important.

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