Two weeks ago, I wrote a blog post about value pricing. That post was, shall we say … full of “attitude” on my part about the concept of value pricing.
The attitude was real and by design.
I had questions.
I wanted answers.
I got answers.
And I was wrong in that post
Wrong in two ways.
ONE: value pricing is not about jacking up prices on unsuspecting rubes. Yes, different clients may be charged different fees, but it’s not about nefariously taking advantage of people. It’s about turning the pricing process outward and looking at the value of what you’re doing for the client rather than just looking at hours punched on the clock.
In my mind, as I read blog post after blog post after blog post about value pricing, I envisioned a bunch of men smoking cigars and drinking scotch in the board room of an accounting firm, slapping each other on the back about jacking up fees.
(Yes, yes … for a grown man I have a vivid imagination.)
My imagination was off the rails on this one. Value pricing is a legitimate pricing method, and the firms that use it take it seriously. They deserve better than the attitude I threw out in my prior post.
TWO: I’m not a “heretic” about value pricing. I actually agree with, and in some cases already use, the concepts of value pricing in my own firm.
I still have questions, such as how one determines that one client gets charged, say, $500 and another gets charged, say, $400 for seemingly the same work. I’m also working through how a solo operator who deals mainly with average folks who need tax returns prepared or with main-street small businesses who need basic bookkeeping services, can implement this pricing structure.
But those are questions, not criticisms. From a basic conceptual standpoint, my original post was grossly unfair to those who practice value pricing.
I write about practice management topics like this because, as a solo operator, setting fees is by far the hardest thing I do. It is far, far harder than keeping up with changes in the law or trying to get all the work done.
More to come, but I wanted to write this post now to admit that my last post on this topic was unfair.
(Thanks to Ron Baker, the father of value pricing for accountants, for providing me with his latest book, “Implementing Value Pricing” and for his patience with my questions in several e-mail exchanges.)