Dan Morris once wrote a post about an attorney who left the equivalent of a Mercedes Benz on the table, in terms of underpricing, with one of his clients.
I’m happy to report a story with the opposite outcome. It’s from Joel, an Enrolled Agent I met years ago in Florida at a CSI conference. Joel has been an enormous advocate of Value Pricing ever since, and has shared many success stories with me over the years. This one may be his biggest yet.
Here’s what he wrote in an email to me on November 21 regarding the pricing on a tax strategy he had developed for one of his customers:
I finally closed my deal. Because I could not charge a price based upon a percentage of the tax savings, I had to give my client a flat price. I made several projections. My client will save approximately $246,435.60 as a result of my structuring the transaction a certain way. My fee will be $80,000.00 with a $10,000.00 up-front payment and the balance paid out of proceeds when the property is sold.
VALUE PRICING LIVES!!!!! Thank you.
PS. You have my permission to use this story and my name as an example of what you teach. Have a great holiday.
Coral Springs, FL
One lesson to take from this story is: Does it matter at all how many hours Joel spent on this customer? Would knowing exactly how many hours he did spend have helped him in establishing the price?
Congratulations Joel. I don’t know if you’re going to buy a Mercedes or not, but there is certainly nobility in being paid for the value you create for the customers you are privileged to serve.