Pricing for profitability starts by rejecting cost-plus as the default. Cost sets the floor of a price and nothing more. Kamyar Shah prices services against the value of the outcome delivered rather than the hours spent, and holds that price with discipline, because every underpriced engagement trains the market to expect less.
A journalist at a financial trade publication recently asked Kamyar Shah how he approaches pricing products and services so profitability is protected rather than hoped for. His answer appears below in full, exactly as he gave it.
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My approach to pricing starts with rejecting cost-plus as the default. Cost tells you the floor, not the price. The price is set by the value the customer receives and the alternatives they have. For services, I price against the outcome delivered, not the hours spent, because hours reward inefficiency and outcomes reward results. The tool I rely on most is simple: a clear map of what the customer gains, expressed in their terms, not mine. When a price is anchored to a real outcome, the conversation moves from cost to value, and margin follows. The discipline that protects profitability is the willingness to say no to underpriced work. Every engagement priced below its value trains the market to expect that price. Profitability is not one decision. It is the sum of prices you were disciplined enough to hold.
Kamyar Shah, Fractional COO, World Consulting Group
Why This Matters
The pattern repeats across mid-market companies. Firms that anchor prices to cost compete on efficiency they do not control, while firms that anchor prices to customer outcomes capture the margin their work actually creates. The hardest part is not the arithmetic. It is the discipline to decline work priced below its value, which is where most profitability quietly leaks away.
Pricing sits inside the broader commercial architecture Shah addresses in his business consulting engagements. Companies re-examining their pricing model alongside strategy can also review his strategy consulting framework.
