Value-based pricing
If your prospective clients are speaking to you about fees and pricing that informs you that you’re seen as a commodity. If when clients receive your invoice, they pressure you for a reduction you know they’re unclear about the value you delivered or the return on investment they received. These are all indicators that you’ve failed to clearly articulate your fundamental value. It’s not the client’s fault. It’s yours!Most professionals love talking about their services, methodologies, and processes:
- Business coaches and consultants jump straight to solution mode.
- Accountants throw out ideas about business structures and tax minimisation schemes.
- Lawyers usually tell the client exactly what their hourly rates are for the differing levels of people in their firm, including the secretaries.
- Recruiters talk about reference checking, guarantee periods, and their placement fee.
- Would you want the cheapest brain surgeon? Leave the discounting to Aldi.
- Will contingency pricing genuinely make for a successful practice?
- Hourly pricing limits your earning capacity and tempts you to take longer when the client wants you to work faster. Of course, then you start upon the doom-loop of “write-offs”.
- How would you prefer your clients think of you? As an accountant/consultant/coach/financial planner/lawyer/recruiter? Or as their “trusted adviser”?
- Would you prefer to be in the business of sales or in the business of relationships?
- Would you prefer to be “prospecting” or would you rather be implementing diverse and interesting marketing?
“The time has come,” the walrus said, “to talk of many things:
of shoes and ships
and sealing wax
of cabbages & kings.”
The time has come for professionals to unlock the shackles that have imprisoned them to the dark and dreary jails of hourly rates and commodity thinking. Let’s talk about value-based pricing: How to charge the fees that you are worth and have your clients gladly pay you for that value.
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“Price is what you pay. Value is what you get.”
- Warren Buffet
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