Episode 58: The Value Pricing Revolution We Need
Show notes
In Episode 58, Sam explores the value pricing revolution we need to have in accounting and professional services industries. This is a conversation that has been around for at least three decades, and still 90% of firms are stuck in hours-for-dollars pricing models.
Sam explains why it’s so hard for firms to shift from those pricing models and the story of pricing in our industries around this. Plus, the mindset shift we need in order to have the pricing revolution we must have.
Sam shares the biggest reasons she sees why this hasn’t shifting yet, including the fears that are keeping us stuck, plus some simple steps to get you started as you rise to meet this challenge.
Finally Sam covers the conversations you have to be having with your clients to find out what they value and the mindsets and skills you need to develop or bring into your business to make this shift.
Listen to an excerpt
What we cover in this episode
The missing piece in our pricing conversations that we’ve been having since 1994
Why it’s so hard for firms to shift from hour-for-dollar pricing models
The story of pricing in accounting and professional services industries
The mindset shift we need in order to have the value pricing revolution we must have
The biggest reasons Sam sees why this hasn’t shifted
How the market has allowed us to get away with it for but are no longer accepting of this
Our fear around selling and the way this blocks us from making the necessary changes
Sam’s suggestions for alternative ways to think about it
Simple tips to get you started as you rise to meet this challenge
How to build your awareness of your mindset around this as you go about day-to-day jobs
Taking this to the next level once you already have this covered in your standard products
Why you must begin finding out what clients value and communicating the value of your work
What mindsets and skills you need to develop and who you might need on your team to support you with this
Quotes
“[Our current pricing model] It's actually a beautiful model. It's the simplest model. And frankly, we would still be not having this conversation if we thought we could get away with it. The problem is the we cannot sell this anymore, it's not appropriate. And it's fundamentally affecting our profits, and the market is deeming more and more that this is not an acceptable way to price.”
“If you try to change anything at all, whether it's the way we price, or the way we even think and look at pricing, it really takes a lot of work to change and we need the tools to actually do that. It's not something you can just shift overnight unless you fundamentally have to.”
“We have to be able to sell it. Any kind of fixed or value pricing, no matter how you look at it, has to be sold upfront.”
“First of all, we've got the fear of ‘I have to change what I've always done, in the way I actually price’ and the second fear is ‘Oh my god, now I have to sell it.’”
“The thing about value pricing and, or any kind of fixed pricing is first of all to actually comprehend the value to the customers. So before you talk to the customer, sit down and think why would the customer actually value this? If we can't figure out what we understand is the value, it's very hard for us to then sell it because we’re not understanding the value to the customer.”
“Value pricing is solely dependent on connecting the value to the customer. That's why it’s called value pricing. So we need to start with our customers on all of this.”
“The gap we've got to bridge and communicate, the conversation we've got to have, is the fact that we don't have the skill set actually change [our pricing], and the skills to then actually sell it. We really need to work on that. And if we can't do that ourselves, we can get great people into your business who can.”
Links
Implementing Value Pricing by Ronalds J Baker
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