August Meeting Notes: Value Pricing

Topic: Value Pricing

Presenters: Dan Morris with Morris & D’Angelo;  Dan@Verasage.com

Upcoming Events:

1.      The Portland Woodard Group Lunch & Learn – Monday, August 12 from 11-1:30 at McMenamins Chapel Brewery in North Portland

2.      ASAP September luncheon – Thursday, September 5- topic tbd.

3.      ASAP/Woodard Group 3rd Quarter Social – Tuesday, September 17th from 5 to 7 pm at the Beaverton Food Cartel.

·        President Kim Boaz opened the August meeting and attendees introduced themselves and stated whether they are accepting new clients.

·        Discussed Value Pricing Not Value Billing.  Billing is after the fact.

·        First law of pricing – all value is subjective.  Example- a coke purchased from a vending machine vs. 7-11 vs. Timbers game vs. Super Bowl are priced differently. 

·        Pricing is a core competency.

·        Many price using cost plus pricing.  Service -Cost-Price-Value – Customer.

·        Value Based Pricing starts with the Customer; determine the Value; determine the Cost and define the Service.

·        8 steps to Implement Value Pricing:

o   Conversation with customer.  Find out what motivates them.

o   Price the customer not the services.

o   Developing and pricing options – give people choices.

o   Effectively present options to customers.

o   Option selected codified into an FPA (fixed price agreement).

o   Proper Project Management

o   Watch for Scope Creep; utilize change orders; need permission from client before incurring extra time and cost.

o   Conduct pricing after action review.  Have conversation- what went well, what didn’t go well.

·        Questions to Ask your client

o   What do you expect from us?

o   How do you define a successful relationship?

o   What is your current pain?

o   What keeps you awake at night?

o   Why are you changing firms?

o   What is your budget for this service?

o   How would you like to measure success?

·        Book recommendations – Let’s Get Real & Breaking the Time Barrier by Michael E. Gerber.

·        Are you telling your customers what you can do for them?

·        Pricing the Customer – no two customers are the same.

·        All Pricing is Contextual.

·        Timing, terms, technology, talent, tailoring, transference

·        The Value Guarantee

·        Article “Pricing on Purpose – How to Implement; June 2009 www.journalofaccountancy.