On June 22 of this year I had the great pleasure of speaking on Value Pricing at the Chartered Institute of Management Accountants (CIMA) conference near Oxford in Great Britain. VeraSage senior fellow Paul O’Byrne spoke at this conference in 2006 on the Firm of the Future.
I remember it well, because it was the first time I’ve ever fell down on stage. I felt like an idiot, but who knows, maybe it was effective? You never know.
Well, I received the kind of e-mail yesterday that we at VeraSage love. It is why we do what we do, and it certainly creates an HSD—High Satisfaction Day. Fred was kind enough to give me permission to reprint his email:
I went to the CIMA conference a few weeks ago in Oxford, England.
I really enjoyed your speech and have since read your book, The Firm of the Future.
I wanted to let you know that after some thought and discussion we have scrapped timesheets and are now ‘Value Pricing’ all new work. It is already having a significant impact! At first the team were uncomfortable with getting rid of timesheets but we have now stopped and I for one feel liberated. I really like the approach that your team costs are broadly fixed and not tracking time allows us to focus on doing the job well. We are also focusing much more on learning and sharing knowledge and I believe this will pay dividends in the longer run.
My first go at value pricing was a few days after the conference. I saw a new prospect who I knew from prior contact was a fine to work with but his tax affairs were in arrears and there were some other significant challenges. I knew that he wanted to work with us and that we could do a good job for him. Rather than my normal way of pricing on hours I tried the value route and came out with a price 3 to 4 times higher than normal. The prospect’s immediate reaction was the ‘ticket price shock’ you describe in your book. To put it mildly he was taken aback. The next day however he came back and said yes. We have been working with him for a month and have enough margin in the price to make sure we do an excellent job. So far it is going well, but we need to deliver as it is satisfaction guaranteed!
I have tried value pricing with other prospects since and some have said no but I have been glad not to take on the work at a budget price.
So I just wanted to say thank you. I read lots of books and talk to lots of people but I believe that Value Pricing and your Practice Equation is the way forward and will really step change our practice.
Thank you again and best of luck with spreading the word!
Congratulations Fred on beginning your journey to becoming a Firm of the Future.
Please sign our Declaration of Independence. I know your British—and it’s an obnoxious document for you to read, but you are certainly now part of a world-wide revolution. Welcome!