My Value Pricing Story
In August 2009, I was the advocate for hourly billing during a panel discussion at the FileMaker Developer Conference. (Ironic, isn't it.) The subject was estimating and billing practices for software developers. Another panelist, who was the advocate for value pricing, said:
If you bill by the hour, there is an artificial limit on your income.
My internal reaction was:
I spent the next 3 months studying value pricing. Then in November, I made a public commitment on the FileMaker Talk podcast to switch from hourly billing to value pricing at MightyData, my software company. Then I hired a value pricing consultant to help me make the switch.
My first value pricing proposal was for a custom healthcare application. After identifying the value the project would create for the customer, I doubled the price I would normally have charged and won the business.
Within 12 months, I made the switch to value pricing with all my customers. Our revenue increased by 56% the first year. The next year, our revenue increased by 79%. And, I have never looked back.
Highlights from My Journey
- January 2010 – I discovered VeraSage Institute, a think tank dedicated to promoting value pricing in professional services. Ed Kless, a Senior Fellow, became a friend and mentor on my journey.
- February 2010 – I gave a standing-room-only presentation on value pricing at the PauseOnError Conference in Portland. Over 50 developers packed a hotel room to learn about value pricing.
- June 2010 – The video of my session, Value-Based Pricing, from the PauseOnError Conference, was the first released to the public. (I like to think it was because of the popularity and quality of the content.)
- August 2010 – I had the privilege to attend the Firm of the Future seminar taught by Ron Baker and Ed Kless. I spent two days with 20 other business owners learning how to implement value pricing.
- November 2010 – I learned that MightyData had been included in the appendix of Implementing Value Pricing by Ron Baker. We were recognized as a company who had made the switch to value pricing.
- January 2011 – I was invited to attend the invitation-only VeraSage Conference in Napa Valley. At the end of the conference, I was appointed a Practicing Fellow at VeraSage.
- June 2012 – I returned to the annual VeraSage Conference, this time in Las Vegas. I participated in two days of public and private workshops with the VeraSage Fellows and guests.
- July 2013 – I joined the START Experience, a private Facebook group started by Jon Acuff. With the encouragement of the group, I cast a vision to launch a business to help professionals switch to value pricing.
- September 2013 – After four years of practicing value pricing, I launched the Art of Value to help other professionals create happy customers and make more money.
Testimonials About Art of Value
When presented with an opportunity to resell a specialized solution, I wasn't even sure what questions I should be asking to price it. Kirk not only asked me the precise questions to guide me to an appropriate, defendable price, he also coached me on how to present the proposal to my client. I presented it and got approval in 20 minutes! With this one sale, I boosted my revenue by nearly 35% over last year. – Jim Medema
For years, I have struggled to properly value the consulting offered by The Red Checker. I priced everything around the number of hours it would take to produce the outcome. In the end though, I had undervalued my work, and my clients believed it was a commodity they could get elsewhere. Working with Kirk, it has become crystal clear that we have been providing tremendous value, and we can benefit mutually with our customers from the value we create. – Amy Campbell
I came to Kirk with much anxiety around the idea of pricing for my services. Through my time spent working with him, I have come to realize that I have no reason to fear pricing when I understand the value of what I offer my clients. Knowing how my clients value my services in order to price them correctly has also made the clients happier and allowed me to make more money!
I contacted Kirk when I was in the early stages of developing my company and he helped me to organize my services and figure out how to best sell my products. Through different types of levels and offerings, I left the conversation with a better focus and perspective on my pricing. His ideas and questions helped me to figure out how to BEST serve both my customer and my bottom line.
Kirk Bowman is both professional and personable. Kirk immediately put me at ease as we discussed the very real challenges facing my business. He listened graciously and captured the essence of my struggle in words that helped me find hope for the road ahead. I am so thankful for his investment of time, encouragement and practical advise on my journey to develop a stronger, healthier business. – Liz Clark