What timing, this email newsletter hit my inbox in the last 1/2 hour from a guy who is a business mentor I follow - David Winch. He could have almost been lurking here ;-)
I support his 'value vs effort' description of pricing as fitting the fixed rate Vs hourly rate debate. I know which industry he is talking about, but that is incidental and shows the problem is just not with us, in landscaping.
"Hello Gary
Amongst some groups of professional services providers I've
been noticing a minority who seem desperately entrenched in
pricing their services by the time they put in or by some other
measure of effort.
I've seen comments that value-based pricing is boring,
equating the supermarkets' use of "value" (i.e. cheap and
moderate quality) with what I mean by value.
Others say they get the concept but can't see how to apply it,
seemingly oblivious to that part of "getting it" which says
that value is in the eye of the beholder, and demanding
formulae to help them calculate value!
There are some who say that their work is very mundane and
that their clients see little value in it, so they "menu price"
these tasks, not realising that asking the clients to consider
the consequences of nobody doing the mundane stuff will
reveal part of its value.
A few make the point that they do charge different prices to
different clients for essentially the same work, but their
reasoning - because they believe one client can afford to pay
more than another - has nothing to do with value-based
pricing, whatever they tell themselves.
Some of the slightly more enlightened say they find it
difficult at a first meeting to gauge what a prospect values
their services at, apparently unaware that by simply asking
they can be told!
I noticed one comment the other day saying that they based
their prices on the number of items they were asked to deal
with, that they made this clear in their quotes but that they
hate quoting!
In a more heated discussion forum, I was asked if value-
based pricing means you get paid nothing. In reply I pointed
out that if your work creates no value for your client then
nothing is precisely what you deserve to be paid!
A retort came back that no-one would use value-based
pricing if it meant charging less, therefore value-based
pricing must mean you are ripping off your clients. This is of
course based on the arrogant assumption that the contributor
believes their prices are already "perfect".
Many of my clients could have made similar analyses and
comments to mine. They have made the investment and put
in the effort to really understand what value-based pricing is
all about, and how it wins over time- and cost-based charging
in so, so many ways."
Views: 41
Replies
ok
I agree with that, every customer has a value that they put on the work required. The point is, is the customers value for doing the work going to meet up with your value for doing it?
If we find the answer to that solution, we would all be very happy.
Gary RK said:
Can you post those details please Gary?
Here's the details : http://www.davidwinch.co.uk/pricing.htm. David is known in our 'industry'.
You can subscribe to regular newsletters etc or take it further by joining up formally.
I am not endorsing, preaching, etc everything that is stated/discussed/recommended, but it one of those situations where we are all adults and you read, digest and take further any ideas you think relevant.
It will be different situation for all of us....
I'l state upfront; I have found some of it really interesting.
Seth Burgess said:
cheers - has anyone read/ watched ' Robert Craven ' ? directors center. sorry to hi-jack gary :)
very good revision - thanks for sharing gary.