Earlier this week, a student in my Make More Money program asked if I had some tips on pricing a project for a nonprofit prospect. They provided some additional context about the client (abstracted to make it more broadly applicable):

They've won reputable awards for their work and want to establish themselves as thought leaders in their space to give back and develop new revenue streams.

Here’s the advice I gave.

One of the most useful concepts for me when I’m pricing an project is the idea of a break-even metric. If you can identify the points where a project “pays for itself,” you know you can deliver something that’s a win for your client.

The best place I’ve found to find the break-even metrics is in a prospect’s goals. Look at their KPIs or OKRs or annual/quarterly planning docs and you’ll find what they are trying to achieve and subsequently might need help with.

From the description above, I see a few things.

First, this sounds like two competing goals: giving back and developing new revenue streams. Conceivably, there are scenarios where accomplishing one may conflict with the other. Which one is the higher priority? More importantly, which one are you helping them with?

Yes, the ideal—and tempting—answer is “both.” But I’m fond of this ancient proverb that’s proven true in my client work and businesses:

If you chase two rabbits, you will catch neither.

If it were me, I’d tell the client I see a conflict between those goals. I’d either say which one I recommending tackling first, or ask which one they’d like help with first.

If the answer is “develop new revenue streams,” that one is a bit easier to approach. I’d try to answer these questions—first by speculating myself, then asking them to validate or correct my assumptions:

• How many new revenue streams?
• How much revenue would they like from each stream?
• Do they need more revenue or want more revenue?
  • Are they doing poorly from a financial standpoint and need to improve their position?
  • Are they doing well financially and want to further their good position?

Workshops and early conversations around these questions will lead you to the break-even price. For example, if they’re trying to generate an additional $10K this year, spending $10K on you would be break-even. If they’re aiming for $100K, then $100K is your break-even price.

(Of course, few prospects actually spend the break-even number because there’s no profit for them. But you need to know what it is, so you know whether you’re charging 50%, 25%, or 10% of it.)

“Establishing themselves as a thought leader in the space to give back” is tougher to quantify. First, I’m not entirely sure how being a thought leader helps them give back, but maybe I’m missing some context.

To me, it’s still two separate goals here: becoming a thought leader and giving back.

Let’s take the first one: they’re hiring you to help them become a thought leader. How do they measure when they’ve achieved that?

(Spoiler: most clients don’t have an answer, so you as the expert may have to help them find it. That’s an advantage.)

Is it:

• Number of likes or shares?
• Number of posts per week or month?
• Invitations to speak at certain conferences or write for publications?

Here’s the gist: any outcome can be measured. If you can’t measure it, it’s not really an outcome (in my opinion).

Or, a more client-service-friendly way to say it is: taking on a project where you don’t yet agree with your prospect about how to measure the outcome is very risky.

If you’re taking a journey with a client but don’t agree on the destination, you may never agree on when (or whether) you’ve arrived. That’s a great recipe for a never-ending project.

So let’s say you do agree that “becoming a thought leader” means getting invited to keynote major industry conferences.

How many?

Pick a number.

(Without a number, you can’t have accountability.)

Let’s say it’s five conferences. Now the project becomes: help them get invited to keynote five conferences. What’s that worth to them?

Well, what happens if they keynote five conferences? I assume something changes for them:

• Do they capture market share from their competitors?
• Do they attract more investment or donations?
• Do they land more clients/customers/constituents?

(If nothing changes for them, it’s probably a vanity project, and I try and recommend to others to steer clear of vanity projects.)

Each of those outcomes can be quantified.

Let’s say they expect to get 10 new donors, each with a lifetime value of $10K. Now the value of the project—and the break-even price—is $100K ($10k × 10 donors).

One last thing: they might not know this info. You might have to help them uncover it.

I’ve worked on many projects where the client didn’t know their customers’ average lifetime value. I helped them figure it out for free before we started the project—because we both needed that data to define success.

Yes, it’s more work.

But this is the kind of work that creates repeat clients.

I’ve had CMOs say that working with me made them a better CMO.

It’s because of this kind of stuff.

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