Transition to Value Pricing – Not Happening?

So you attended a Value Pricing session with Ron Baker or Mark Wickersham. You have watched YouTube videos about how amazing life is with value pricing, and how value pricing is the future. You can’t wait to tell your colleagues about your new found enlightenment – once they hear about it, they too will be amazed. Nirvana is not far, you will be the hero who suggested that the company move to value pricing… and everyone is happy forever after – NOT.

While you have been enlightened, transition is a bi***h. You can not change an established mindset, especially if your company has spent so much time improving  internal systems to bill by the hour. Here is what you are likely to hear –

“this is the way we have always done it”

“if it isn’t’ broken, don’t fix it”

“we have other important priorities”

“lets put this on the back burner”

and my favorite “wow, I love it, but others will not agree”

These are the decent responses, I would love to hear what else you heard, comment below.

So now what!!! Do you just give up? You know from the bottom of your heart – you need to move to value pricing. QuickBooks and other accounting packages have made things easy, the time taken to do routine tasks is down. Plus, you have become more efficient, and now you will be penalized for your efficiency because it takes you less time to get stuff done, so fewer billable hours for the same task! Lets not forget predictable revenue, how awesome is that. The list goes on.. it is the future my friend, so don’t give up.

 

First the Baby Steps

If you are influenced by Ron Baker, he is going to ask you to drop time tracking all together and get a life. Let’s start by making this our 2nd-year goal.

The first step should be to pick a receptive client or two and give them the Mark Wickersham spiel on your beautifully designed packages and have the value conversation with them.

Talking about the value conversation – it does not get better than this

Value Conversation with the customer, including the best opening statement to begin this conversation: “Mr. Customer, we will only undertake this engagement if we can agree, to our mutual satisfaction, that the value we are creating is greater than the price we are charging you. Is that acceptable?”

Credit: Ron Baker

Just to be safe, continue to bill tasks hourly that are outside the scope of the package – with the aim being to ultimately move away from hourly billing by next year

 

Build the case

While you digest the occasional jibe about value pricing, you need to build hard data. Once you have few clients on Value Pricing, generate reports to show your team the ‘numbers’ and ‘trends’.  ‘Value Pricing vs Hourly’ would be a good report – generate it.

You also need this report to see if your packages need to be tweaked. Once you are satisfied.. get ready to roll out aggressively.

 

Use it as a marketing tool

Use value pricing as a marketing tool to acquire new clients. You will be surprised how well it works. Once you start acquiring new business with this model – people will become curious.

 

Grow, then grow aggressively

Once you have your internal ducks lined up, start promoting this model to every client, old and new. Sooner or later people will buy into this model, then push it even more. Make sure your internal system is ready to explode with this new business model.

 

Do the unthinkable

Once everything is settled, and the firm is purring along, casually start a conversation about dropping time tracking altogether. Read Ron Baker’s books/blogs and be inspired by his passion to get rid of timesheets from the face of this world. We at TimeRewards have been so influenced by him, that we have introduced the ‘Ron Baker Timesheet Kill Switch’ in our application. More about that in a different blog…

 

Enjoy the fruits of your labor

Enjoy the benefits of predictable recurring revenue, a greater insight into future work, happier clients, and a firm that is future ready. Also, get ready to hear –

“I was always a believer”

“This was an obvious transition, everyone is doing it”

“It’s nothing new, just an extension of fixed-price billing – I was doing it anyway”

and my favorite “Hey, this was my idea” !!!

 

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