A Debate on Quoting Hours to Customers

While I was in Kansas City, Missouri, this past November along with VeraSage senior fellows Paul Kennedy and Michelle Golden, teaching two courses for the Missouri Society of CPAs, Paul gave me a copy of a new book, Life Without Timesheets: The freedom to charge what you are worth, by Hugh Williams, a Chartered Accountant from Britain.

On my flight back home I read the entire book (it’s a quick read, at 72 pages). I was impressed with Hugh’s story, and I e-mailed him when I returned home.

That started a dialogue (and a friendship) that continues to this day. We both felt it would be worthwhile to publish this exchange because Hugh and I disagree on a critical issue. Certainly not on the validity of timesheets (since he got rid of them!), but rather on still communicating hours to customers in order to justify a price.

VeraSage profoundly believes that truth (and science) progresses based on dissent, not consensus. I don’t learn much from people I agree with. It is in that spirit we are posting this exchange. It is a long exchange (over 5,400 words, which is why we have placed it in a pdf file you can download and read at your convenience), but we think it’s an important contribution to the Value Pricing debate.

Please feel free to weigh-in with your opinions, and experiences. Hugh and I look forward to continuing this important dialogue.

Ron

Comments

  1. Ron,

    Yet another wonderful reply – even better than the first because, to be perfectly honest, I have to admit “You win!”

    I am good in defeat and always admire and applaud a good loser more than just about any sort of winner, but, while I accept defeat over this, it may be a while before your message sinks in and all trace of thinking that “I might just try to justify this quote using hours” has gone. I’m that sort of sloppy thinker!

    But I can see, you are right. In fact today something has happened in this connection to tip the scales in your favour.

    The instance concerned is the case of a lady – one to whom I quoted a large fee in connection with tax planning – who has just learned that the Life Assurance policy we had been banking on as part of her strategy is not available because she has had a cancer scare – and all it was was a scare because she’s since been given the all clear. Now why this is important is because I quoted her a fee, for which she paid up front, and now, many months later I suddenly have a whole lot more work to do (all part of the guarantee) because of the poxy insurance company’s decision. So here is a classic example of how “hours” to the client are totally irrelevant. She now needs advice and, while she is a sweet lady and will not be thinking this in a bad way, she has paid me to help her and, now that the carpet has been tugged from under her feet, she needs me more than ever and she won’t be giving a smidgeon of thought to the hours, hourly rate involved etc, whatever.

    I’m not putting this clearly – all part of my woolly sloppy thinking – but this episode has been a BFO, on top of your fine words. So game set and match to Ron! Well done.

    I have to admit (hate doing this) that we are now in our horrendously busy tax filing period and so replies for a couple of months will be somewhat spasmodic. But I must pick up on three points:

    Yes, that poem by Edgar Guest is WONDERFUL. A sort of son-of-Kipling’s IF. I have often quoted it and am very grateful to you for including it in your book.

    Then today there has been a tiny afterthought of a review for my book – it refers to me as living on another planet. Let’s call that “Planet Ron!” At least the inhabitants there are sane.

    And finally I am not at all touchy about the D of I. While “proud to be British”, I am more ashamed than proud of what the English have done in many (many) places in the world.

    I thank and salute you, King Ron!

    Yours ever
    Hugh

  2. Hi Hugh,

    Thanks so much for your email. I don’t consider it a surrender, I just see it as effective education.

    I did put your last email into the pdf, and I may also put it in as a comment on the blog/trailblazer post.

    I’m not gloating, really. I’m thrilled you see the point. The teacher only arrives when the student is ready.

    And now the next step is to make you a teacher…
    Ron

  3. Gentlemen – have you not heard of Naked Conversations by Robert Scoble and Shel Israel?

    This was a book developed online and pfretty much edited that way. It then went to Amazon and has been one of their best selling books for 2006.

    Cory Doctorow says that putting his stuff out into the blog community has paid back more than he can count.

    Might I suggest that an alternative way of looking at this is to consider Hugh’s book as representing the hourly inputs of which he is trying to rid himself. That way, his thinking about lost opportunities evaporates.

    As Ron says, it puts him at the centre of a potential global audience.

    BTW – thanks for reproducing the debate. Beautifully executed and a great example to other accountants on communication – IMO.

  4. Hi Ron (and Hugh), I can’t find the pdf file. I seem to be going round in circles!!!

  5. Edward J Kless says:

    Three cheers for this exchange! It is like being at the feet of Plato and Socrates.

    Just two additional thoughts:

    1. If you are struggling with uncovering value for a prospect or customer, (Ron refers to this as Convince), please read Mahan Khalsa?s Let?s Get Real or Let?s Not Play. Mahan is the master of structured questioning. His questioning technique will enable you to have prospect begging you to work for them.
    2. (And I am surprised Ron did not mention this in the exchange.) The most effective question to ask a prospective client with regard to the ?one-off? engagements is ?What is my budget?? Not what is ?your? budget, but ?my? budget. I have talk to about a dozen people in the past year who have begun to use this technique. Often, the customer comes up with a price that is higher (significantly) than the wimpy-pricers would have been!

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