What type of consulting fee is based on a specific outcome rather than input costs?

Outcome-based pricing is a consulting fee structure that emphasizes the achievement of specific results rather than simply billing for time spent or resources used. In this model, clients pay consultants based on the outcomes or objectives they successfully deliver, which aligns the interests of both parties. This approach can incentivize consultants to focus on delivering tangible results, as their compensation is directly tied to the success of the project, rather than just the process of consulting.

This type of pricing can be particularly effective in situations where the value of the services rendered can be clearly defined and measured, creating a clear link between performance and payment. It shifts the focus from merely "how much time was spent" to "what results have been achieved," fostering a collaborative environment where both clients and consultants are motivated to achieve the desired outcomes.

In contrast, other types of fee arrangements, such as daily rates, fee for service, and pass-through costs, primarily focus on transaction-based billing or cost recovery rather than on achieving specific, measurable results for the client.