Some of the most popular episodes of the Art of Value Show are my conversations with Susan Fenneman, our Dean of Success. For this episode, she and I selected a handful of topics for discussion. The catch is, we did not share the topics with each other before hitting the record button. It is an unscripted conversation that is a glimpse into the internal conversations at Art of Value. We call it an “un-episode” to describe the open format of the show. Let us know if you like the format (no not) by leaving a comment below the show notes.
Value Pricing With A Process
- Accountants have problems learning value pricing because the gray area is more challenging for the way their minds work.
- Andrew Robertson teaches a process to ease people into value pricing.
- One of our customers contacted us to let us know that the process we worked with her on is working in her business.
- While Andrew's process eases accountants in, our process is more how to jump in feet first.
- Andrew's process allows the “lowest level” employee to do the basics (tax/compliance) and use the partners' soft skills to price their more strategic work.
- Firms can also offer the benefit of no timesheets to attract a higher quality entry level employee.
- Kirk bit the bullet, made the commitment and jumped off the cliff to value pricing.
- Andrew has found a way to get past the objections and provide a bridge to embrace value pricing in accounting.
- We teach a methodology which is one-third sales process.
- Our customer said that because she had the process and followed it, the outcome was better.
- There is value in the process of implementing value pricing.
TurboTax vs. Accountants
- You get what you pay for with cheap accountants.
- The process with TurboTax provides you with options to fit your specific tax needs.
- It also offers a community where you can ask questions.
- Accountants that are on our show are good accountants, and some small businesses (or side hustles) cannot afford good accountants.
- Some small business owners do not need the added value that good accountants provide, yet.
- Billing by the hour is not a business model.
- It is frustrating to have to pay to correct mistakes when you are working with someone who bills by the hour.
Packaging Services by the Hour
- Massage therapists and counselors are good examples of professionals limited by time.
- What if the session was not bound by time?
- What if you could stop early or extend the session past the expected time if you were in the middle of something?
- Create margin to allow sessions to run long.
- The Royal Pains TV show demonstrates how concierge medicine might be practiced.
- You can be paid on retainer, not take insurance and bill for extra services.
- The monthly charge per person per month for a doctor is like an access level agreement; she will not see people who do not have an agreement.
- The further we can get away from time as what we sell and how customers think of it, we can provide more value and charge for it.
- If a provider worked on the margin philosophy, he could improve his patient/customer base as well.
- Ideas for options for on-call massage therapy options:
- Standard is a 1-week turnaround.
- Premium is 3-day access.
- Exclusive VIP Members provide 1-day access, and there is a limit to how many can be a VIP at the same time.
- Massage Envy is an example of a commodity-based business in this space.
- There is room for all different types of providers in the market to appeal to a wide variety of customers.
90-Day Return Policy
- Home Depot changed its return policy from a 30-day to a 90-day policy.
- The upside was that it decreased their overall returns.
- Susan's perception was that people felt more like they owned the product and were less likely to return it.
- Kirk thinks it is because:
- Customers are more willing to buy because Home Depot is willing to take on more of a risk.
- Customers cannot remember the 90-day deadline.
- This raised a lot of questions for us:
- Is there a moral switch that goes on in your brain when you keep something for longer?
- Is there a sense of shame of returning something after 90 days?
- What was the marketing idea behind it?
- Were they competing differently?
- Did they expect this outcome of something different?
- If you are the Chief Return Officer at Home Depot, leave a comment, and we will invite you to the show!
Frame Control in A Sales Conversation
- Kirk interviewed an author who wrote a book about frame control.
- Frame control is a theory that everyone comes into a conversation with a perspective.
- Think of those perspectives as frames; the frames will collide.
- At that point, one will “win” and one will “lose” in the context of controlling the conversation, being intentional.
- The book is about pitching in investment markets.
- The people are usually Type A personalities with big egos.
- Kirk wanted to talk to this author about applying the concept of framing to value conversations.
- Twice during the interview, the author applied frame-control to Kirk around the timing of the interview.
- Driving your schedule becomes easier when applying frame-control.
- You cannot use this sales method with all personality types.
- The author mentioned that the average meeting has about 20 minutes of real substance. The rest is fluff.
Adapting Your Process to SaaS
- Some people will say that off-the-shelf products do not work for them.
- When you find one thing that it does not do, but it does everything else, take some time to figure out how it could work for you.
- Basecamp does not have a way of managing bugs, so a specific software company chose not to use it.
- But, MightyData uses Basecamp to manage bugs, because we developed a process to make it work.
- You can develop a process within the framework of what SaaS is.
- People want things off-the-shelf because of the value you can get, but then will give up without trying a creative approach to make it more valuable.
- With custom software, you can have a change implemented, but you have to look at the value of the change.
- Sometimes you can even adjust your internal process to reflect what the tool allows you to change in your business.
- Be creative in your process – both internally and how you apply it.
- “I think it's cool” is not a reason for a software feature, per Curtis McHale.
- As discussed in Episode #33, return to your wish list when the customer is ready to tackle it later. If he cannot remember what the request meant, it is probably not a valuable thing.
- If you were billing by the hour and just implemented the request, you reacted and charged the customer for something he may not need.
- If you can justify it by dollars, time saved or some other measure/result, you know you need it.
About Susan Fennema
Susan Fennema is the Dean of Success for Art of Value and MightyData. According to Kirk, Susan is the “best project manager on the planet”. She enjoys walking her overly energetic puppy and then relaxing by the pool with a great glass of Cabernet.