Value Pricing Is A Business Model

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I have written previously about the wonderful series of interviews Kirk Bowman and his talented project manager Susan Fennema from Art Of Value has been doing over the last year or so.

I cannot recommend these interviews enough-no matter what profession or business you are in.If you are even remotely interested in creating and capturing value for your customers (and shouldn't that be anyone in business) these are must listen to interviews.

Kirk has so far interviewed over 60 professionals from all ranges of professions and businesses-including legal,accounting,IT,consulting-as well as pricing experts,branding & project management specialists,industry commentators,and best selling authors.

It is impossible not to find something of benefit to any listener in every single one of these interviews, even if the interviewee is not from a similar business or industry to yours.Indeed that is one of the huge benefits when someone like Kirk assembles experts from all walks of life who share their own insights and stories and you suddenly realise both the similarities to your own journey and/or indeed how you could benefit from their experience by applying some of it to your own circumstances.

Having said that as a recovering lawyer, and as many of my readers are involved in the legal profession, I can highly recommend Kirk's recently released interview with David Wells Managing Principal of Moores an Australian law firm.

Kirk has titled the interview with David "Value Pricing Is A Business Model". Anyone who is practising value based pricing knows just how true that is and any professional who believes that value based pricing is just another billing model will in my view never be able to successfully create sustainable value for their customers.

Reading Kirk's bullet point summary of his interview with David will give you some insight into the power of this podcast. They cover topics like:

  • When you charge by the hour, you are not pricing at all.
  • There is a transformation that happens in a professional knowledge firm when it starts pricing.
  • Lawyers who value price are more content in their profession.
  • Lawyers in their office celebrate after a good proposal that is accepted, rather than only after a big legal win.
  • The transformation of the people was unexpected and delightful.
  • Their transition over a 2-3 year period was well-supported and a process.
  • It has provided a competitive advantage.
  • To embrace value pricing, they had to make changes to their knowledge management system– the way they collect and shared their knowledge.
  • A new set of competencies had to be developed to measure employees, to avoid basing it on hours.
  • The new competencies are more innovative and encouraging for the employees.
  • Systems for managing projects had to become more sophisticated.
  • Business development also had to be modified to determine which customers would be most suitable.
  • It has enabled a completely different practice than what they had 4-5 years ago.
  • The results are:Happier customers,Different customers,Different employees.
  • When experimenting with the business model, they were careful to ensure the customers knew they were not guaranteeing the outcome but they can guarantee the level of service they provide.
  • They discuss with the customer what level of service/quality they desire, as it affects the price.
  • You can price (and manage) litigation by breaking the work down into stages.
  • With the billable hour, you can get away with poor project management but you have to be able to manage projects well to value 
  • The timesheet is not necessary for a legal practice
  • Many lawyers are not aware of how much good work they have done for a customer.
  • Their confidence and skill level have improved based on value pricing.
  • To price for value you have confidence in your intellectual capital and how you leave a customer in a better place, and when that happens it improves you as a person and a professional.

Do yourself, your team and your customers a big favour and subscribe to these stimulating podcasts

 

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