After discussing the limitations of hourly rates in a Facebook group, Matthew Habuda decided to give value pricing a chance. He started with a small project and progressed to a Fortune 500 opportunity. Along the way, he had to convince the customer and subcontractors it was the right decision. He shares his results and why he will never bill by the hour again. Top of Show Resources Without the Conversation, There is No Value Pricing, by Ed Kless Kansas Supreme Court Says It’s … [Read more...]
Why I Disagree With Seth Godin
Seth Godin recently published a blog post titled When to charge by the hour. And while usually I agree with most of what he writes, this time, I have a different point of view. First, in principle, I do not believe anything should be priced by the hour. The customer is buying the outcome of the service, not the hours and minutes to create it (inputs). Second, pricing by the project is better if the price is based on the value to the customer. Usually, a project price is a fixed price based … [Read more...]
A Second Chance at Value Pricing with Tim Dietrich – 073
Tim Dietrich is a mobile application consultant and the developer evangelist for Airtable. He was formerly a database consultant in the FileMaker space, creating several open source projects for the community. He majored in computer science at Towson University. Tim's first appearance on the Art of Value was episode #28, A Contrary View to Value Pricing. It Is Not Too Late What is the most important thing you can share about pricing? It is never too late to change your mind and … [Read more...]
The Funniest Thing About Value Pricing with Greg Kyte – 048
Greg Kyte is a CPA and comedian. He teaches ethics and fraud courses for accountants with a comedic edge at ComedyCPE.com. He is also the G. Robert Newhart Non-Value-Added Fellow at Versage Institute. The Real Context of Value What is the most important thing you can share about pricing? You need to price your services like you know magic. The Labor Theory of Value says that the value of something is equal to the materials and labor it takes to create it. It is a fallacy. … [Read more...]
Lawyers Can Switch to Value Pricing with John Chisholm – 042
John Chisholm helps law firms move from hourly billing to value pricing. A 25-year lawyer turned business consultant, he says the problem with the cost of legal services is not the amount. It is the unpredictability. Customers prefer the experience of and will pay more for price certainty. John shares how this single change can inspire a spirit of innovation and entrepreneurship in lawyers. Value Pricing in Law Firms What is the most important thing you can share about pricing? No … [Read more...]
Do Not Assume in a Value Conversation with Jonathan Stark – 038
Jonathan Stark is a mobile consultant who helps retail brands thrive in a post-PC era. He's written three books on web development including O'Reilly's Building iPhone Apps with HTML, CSS, and JavaScript. He made the national news with Jonathan's Card, an experiment using mobile payments at Starbucks. He ditched hourly billing and has 10 years experience with value pricing. Value Pricing vs. Hourly Billing What is the most important thing you can share about pricing? Do it! If … [Read more...]
Price Communicates Your Value with Jay Shepherd – 029
Price is more than a number. It is part of how a lawyer communicates value to the customer. To unpack this principle, Jay Shepherd, an employment litigation attorney, compares how a customer perceives an hourly rate vs. a fixed price. He says knowledge instead of activity is more valuable to the customer. Value pricing enables the customer to purchase what he wants in a manner he truly enjoys. Hourly Billing in the Legal Profession What is the most important thing you can share about … [Read more...]
A Contrary View of Value Pricing with Tim Dietrich – 028
Tim Dietrich is a database consultant, specializing in the FileMaker platform. He is the author of FileMaker Pro 13 Absolute Beginner's Guide and creator of FMEasySync, an open source sync framework for FileMaker. Wins & Losses in Value Pricing What is the most important thing you can share about pricing? Tim mentioned my session from FileMaker DevCon 2009 with Jonathan Stark. Tim and I both studied value pricing and came to different conclusions. Tim thinks value … [Read more...]