Words matter

We at VeraSage have always been very persnickety about the words we use. Words have meaning, and we use them to label and help us comprehend the world around us. Yet many of them are distorting lenses that can make us misperceive and misjudge what we are observing. The great nineteenth-century English jurist, Sir James Fitzjames Stephen, put it aptly, "Men have an all but incurable propensity to prejudge all the great questions which interest them by stamping their prejudices upon their language."

Read any VeraSage material and you'll notice we use the words customer, price, invoice, and team member in lieu of, respectively, client, fee, bill, and staff (unless we are quoting others). We do this because we believe these words convey better images of what they are attempting to describe. The welfare state has clients, while businesses have customers. A fee is negatively associated with a tax or some other charge, while price is a benign term most customers easily comprehend, conjuring up no positive or negative images. We don't use value billing, because that takes place after work is done, whereas value pricing is always done before work is started. We dislike the terms human resources, assets, or staff (sounds like an infection), as people deserve more respect than tangible items or timber. Hence our use of the term human capital, or better yet, volunteers.

For serveral years now, we have advocated that firms establish a pricing committee in order to set prices consistently. This also allows a group of dedicated pricers to become experts on the subjects of value and pricing, and develop pricing as a core competency in the firm (the only competency we seem to have now is in cutting prices). I have advocated firms call this a "Pricing Cartel," in order to conjure up images of price fixing within the firm (nothing illegal, of course). My colleagues in London, Paul O'Byrne and Paul Kennedy, have called theirs a Value Council.

Yesterday, I received this email from VeraSage Senior Fellow Peter Byers explaining how he has evolved these terms even further:

Hi Ron,

A few lawyers have found that when they changed the name of the "Pricing Committee" to "Client Engagement Committee" they gained immediate acceptance that Value Pricing is not just "about price" but an on-going conversation with the customer in all respects—price just being one of them.

Are you aware of anyone else having done this and what were the outcomes?

In these particular cases they found that the solicitors were much more willing to approach the committee to have their "price" and service content reviewed—previously they had found that the lawyers were reticent in coming forward least they be perceived as weak.

Peter

I think this is a good alternative term, though I'd change client to customer, and would be interested in what other firms have begun calling their pricing cartels. We need to pay close attention to the words we use to ensure they conjure up the right images. Communication is not just about what you say, it's also how you say it.