WHY WE MOVED FROM T&M TO OUTCOME-BASED PRICING

Clients wanted certainty. We wanted alignment.

CONTEXT

We had spent three years selling our work through time-and-materials contracts.

The model worked financially.

But it created the wrong incentives.

Clients wanted predictable outcomes. Our teams were rewarded for utilization. Those two things were increasingly in conflict.

We stopped selling hours.

We moved to outcome-based pricing for engagements where the result could be clearly defined.

Rejected because it preserved the utilization incentive.

Rejected because not every engagement has a measurable outcome.

Rejected because waiting would mean letting the old incentives compound.

Six months later:

32%reduction in scope disputes

18%increase in client retention

The change did not work universally.

Three clients rejected the model.

Those clients were not a failure of the decision. They revealed where the decision did not apply.

PRICE FOR THE OUTCOME, NOT THE HOUR.

WRITTEN BY

Chief Executive Officer

“This decision looked obvious in hindsight. It wasn’t obvious when we made it.”