Are You Afraid to COMMIT to Value Based Pricing?

value based pricing

“How can we get our associates to embrace Value Based Pricing? Everyone is so used to living by the demands of their time sheets.” Three professional services firms’ owners and founders asked me this question last week.

I hear you! Habits are hard to break and their impact goes deep. Value Based Pricing goes deep too, and it takes a concerted effort to switch out the old practices and make Value Based Pricing the default. There is no switch to flip. It’s a process that requires ‘doing’ every day.

COMMIT is the first step of the 5 Steps for a firm that wants to crack the pricing code.


I’ll be devoting an entire chapter to this in my new book. Here are some ideas to get you started.

Owner Mindset Matters

“Leadership is not a position or a title. It is action and example.”

Value Based Pricing requires a deep-seated commitment from the leader–owner, founder, partner or executive. He or she has to provide a stellar example of how to act on this commitment every day.

One of the best examples is signing a client to a value based fee service offering. That will happen if you keep working at it.

How to COMMIT to Value Based Pricing

Leadership example and action are based on three fundamentals. Value Based Pricing:

  • Is the only Ethical pricing model.
  • Provides high value benefits to clients.
  • Provides unlimited growth opportunities to the firm.


Do you believe you’re honest and live life with integrity and ethics? If so, you should be able to adopt value based pricing without hesitation. For whatever other benefits Value Based Pricing gives you-and there are many—the first and foremost is that it is the only ethical way to serve your clients and customers.

Make the ethical conflict perfectly clear:

Our clients and customers deserve to get the outcomes and benefits we promise as soon as possible commensurate with quality. When we bill hourly, we are in the position of benefitting the longer our work takes.  We will no longer tolerate this conflict as the cost of doing business.

High value to clients

When the meter is running, as it does with hourly billing, clients are wired to focus on inputs and getting the deliverable rather than on quality and value. After all, the longer you work, the higher the fee. Hourly billing does not connote value, only time.

Value Based Pricing helps you work with the client to articulate their most desirable outcomes. One of the best practices of Value Based Pricing is offering three levels of value, each with a fee commensurate with the value. The client chooses. We dive into this in the PREPARE Step.

Unlimited Growth Opportunities to the Firm

When you adopt value based pricing, you open everyone’s mind to value creation. After all, if clients will be benefitting from value, there’s a huge upside to devoting considerable effort and energy to creating more value and offering it. You can offer this new value at fees commensurate to that value which the client will clearly understand. We explain this in detail the TRAIN Step.

If You’re Still Wavering…

Did you dream of founding your firm because you wanted to sell billable hours? I hardly think so. You want to serve your clientele with your knowledge and expertise. Remember, your 40 hours (or 50 or whatever) are perishable. If they don’t sell, you can’t get them back. And you have to deduct from inventory the time it takes to do admin work and other non-billable tasks.

There’s no sell-by date on value. No lost inventory, no panic when there are unsold hours. While you’re working for a client, you are always making money, since you’re creating value and that’s what they’re paying for.

I will never ask you to flip a switch to Value Based Pricing. I will invite you to start the process with Step One COMMIT. Ready?

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