Last Thursday I was at the Ohio AAA (Association for Accounting Administration, not the automobile people) meeting with a room full of other minds eager to hear what Ron Baker had to say. As always, Ron had a lot to present—and we soaked it up like a dry sponge on a Seattle sidewalk. If you’re not familiar with Ron Baker, you should be. He runs the VeraSage Institute and is the chief voice behind the value pricing movement in the professional services world. I urge you to find out more about Ron and VeraSage by clicking here.
Why not stick with the billable hour? Says Ron, “My argument against the billable hour is that it leaves money on the table.”
Another gem that smacks the accounting profession like a hurricane: “If you’re selling something that involves risk, it’s not a commodity.”
Oh, here’s another one for good measure: “Your firm is defined by the customers that you don’t have.”
Spending the day with Ron, including my delivering him to the airport at the end of the day, was like going back to business school with a dose of Steve Martin-ish humor tossed in for good measure. When you have the opportunity to take part in one of Ron Baker’s sessions, do it, even if you’re dead-set on sticking with the billable hour system.
The Five Cs of Value
1. Comprehend value to customers
2. Create value for customers
3. Communicate the value you create
4. Convince the customers they must pay for value
5. Capture value with strategic pricing based on value, not hours
Check out one of Ron’s books here.
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