Bold Session Recap – From Service to Value: Unlocking Real Business Model Change
Shifting from a traditional service model to value-based pricing is one of the biggest transformations an agency can undergo.
Yet, many agencies struggle to break free from outdated pricing structures, over-servicing clients, and competing on cost rather than value.
We spoke with Caroline Johnson, Co-Founder of The Business Model Company, who has spent the last two decades helping agencies and professional service businesses rethink their revenue models. With a background in corporate advisory, she has worked across markets and disciplines to help agencies scale, improve profitability, and increase their valuation.
In this session, Caroline shares why the biggest blockers to change aren’t in the market but within the agency itself, the five key milestones for business model transformation, and how agencies can confidently transition to value-based pricing while minimizing client pushback.
Can you tell us a bit about your background and how The Business Model Company came to be?
My background is somewhat unusual. I’ve been working in business model change for about 20 years now, with a particular focus on professional and creative service businesses. I originally came from corporate advisory, where I was a partner, and one thing we realized was that if you repackage fundamentally great service businesses into a different business model—whether that’s advisory, platform, product, program, or license-based—they become significantly more valuable when it comes time to transact.
Typically, strong service businesses sell at a multiple of 6 to 6.5 times earnings. But when you shift to a scaled product, program, or advisory model, those multiples start at 12 and can go up to 18. So, in corporate advisory, it made sense to develop a practice around repackaging strong marketing services companies across various sectors to maximize their valuation.
Nine years ago, we established The Business Model Company with a singular focus: to run business model transformation programs specifically for the creative and professional services industry. That’s how it all started, and we’ve been helping businesses evolve ever since.
What would you say, on average, are the main blockers for agencies to consider this model? What are some wrong assumptions or concerns you often hear from clients?
Many agencies believe that their biggest challenge comes from the marketplace—whether it’s clients exerting too much control, procurement making things difficult, or competitors undercutting them. But that’s the wrong assumption. The real barriers aren’t external; they’re internal. It’s the agency’s culture, behaviors, values, and belief systems that hold them back.
A common question I hear is, “Will procurement let us do this? Will clients accept it? What if we don’t win?” Those concerns come from a mindset rooted in fear and external dependency. But the reality is, clients respond to confidence, clarity, and value. If an agency doesn’t truly believe in its ability to control its own engagement and pricing model, it will always default to the lowest common denominator.
That’s why our work isn’t just about pricing models—it’s about cultural transformation. If you try to change your pricing structure without changing the underlying mindset and behaviors, it won’t work.
Can you walk us through the five key milestones that help creative businesses confront the essentials of whole system change and provide some detail on each?
Absolutely. These five milestones form the foundation of successful transformation:
- Committed Leadership – The single biggest predictor of success is whether the leadership team is truly committed to change. This isn’t about trying out a few pricing tweaks—it’s about fundamentally rewiring the business while keeping the lights on.
- Master Your Models – Agencies need to move away from outdated revenue models like pitching and over-servicing. Instead, they should adopt models that support scalable, sustainable, and profitable growth. We typically work with two core models: “Value” (for high-value consulting and strategic work) and “Hybrid” (a mix of traditional and value-based).
- Develop a New Language – Language shapes behavior. Agencies must move from a process-driven “we do this, we do that” narrative to a value-driven “you will have, you will achieve” approach. It’s about shifting from effort justification to outcome-based communication.
- Transform the Client Engagement Model – Too many agencies operate with a supplier mentality, accepting briefs and pitches without asserting strategic value. The goal is to reposition as a consultative partner, balancing service with authority.
- Be Proudly Commercial – Creativity plus commercial acumen is a superpower. Agencies that fail to embed strong commercial principles into their creative work miss out on major opportunities.
Practically speaking, for agencies that have implemented your services—what kind of success stories have you seen? What does that success depend on?
Success varies depending on the starting point and ambition of the business, but common themes include:
- Moving from a declining or disrupted model to a future-proofed one
- Significant margin increases and a shift from low-value work to high-impact engagements.
- Agencies growing from 30 people to 300 through structured transformation.
- Businesses achieving successful exits, often at much higher valuations than they would have under a traditional model.
The key to success? A clear goal from the outset. Agencies that “dip a toe in the water” rarely see meaningful results. Those that commit fully, align leadership, and embrace the process experience the biggest wins.
How can agencies handle situations where clients push back on value-based pricing and prefer a traditional service or hourly model?
The key is to demonstrate additional value. If an agency tries to sell the same services at a higher price, clients will push back—rightly so.
Instead, agencies need to publicly communicate their transformation journey, explaining how they are shifting their business to deliver greater impact. Agencies that have done this successfully don’t struggle with client buy-in because their clients can see the additional value being created.
New business is easier because the agency enters conversations with the right positioning from the outset. For existing clients, the transition is smoother when they recognize the benefits rather than simply being asked to pay more.
What are the biggest challenges agencies face when transitioning from project-based pricing to value-based pricing, and how can they overcome them?
The biggest challenge is leadership commitment. If leadership isn’t fully aligned, the transformation will fail—not because the model doesn’t work, but because the agency didn’t follow through.
That’s why we start every engagement with a business case based on real data. We define the new revenue model, align leadership, and provide a structured methodology to ensure they stay on track.
Once an agency starts the process, we guide them through every step with tools, processes, case studies, and best practices. But the transformation itself depends on a leadership team that’s truly ready to commit.
Last but not least, are there any resources, such as a book, website, or podcast you’d like to share with our listeners?
We have an extensive library of content, including recordings of our talks, case studies, and conversations with clients who have gone through this transformation. I’ll send the full list over, and anyone who’s interested can reach out for access. There’s a wealth of information available, and I encourage anyone serious about transformation to dive.
