Pricing services came up when I was sitting with my daughter’s boyfriend who is resurrecting his computer tech business. “How do you charge your clients?”, I asked. The answer had a familiar ring. I had the same retort (and confused face) when scores of people were talking about moving my practice from hourly to a fixed fee. The pain I went through to determine my value in a client’s eyes as well as moving toward that space after so many years.
Value Pricing Definition
Value pricing is defined as “a pricing strategy which sets prices primarily, but not exclusively, according to the perceived or estimated value of a product or service to the customer rather than according to the cost of the product or historical prices”. There are some amazing mentors* in this field: Ron Baker, Mark Wickersham, Seth David and a host of other leaders in this movement, including Intuit. QuickBooks Pro Advisors and CPA firms have been slaves to hourly fees for many years.
How to move into this direction takes some research. I went through the Woodard Institute series of classes and sat in on many breakout sessions at conferences. Some firms and advisors use a grid depending on transactions, number of bank accounts or size of firm. These pricing strategies may be presented as a three-tier approach with a small, medium and large offering. Others base their proposals on more sophisticated metrics.
A New Era
That kind of disruption in their lives seems unattainable. Start by asking others in your peer group what they do. Do some reading and attend webinars. Get a feel for what is right for you. Start with your consistent clients who are the low hanging fruit. And finally, make sure you have a methodology for measuring your success!