Are You Trapped By Certainty about Your Pricing Model?

trapped by certainty

Adopting Value Based Pricing, which is the only ethical pricing model for services firms, will lead to a complete makeover of the company’s systems and thought processes. It re-shapes everything you’ve been certain about.

That’s a great benefit for growth-minded firms and their clients.

Certainty can become a trap. Conditions change, and you must be willing to acknowledge that, to adjust your thoughts and actions accordingly.

Step 3 ESTABLISH of Crack the Pricing Code: Implement Value Based Pricing and Generate Fortunes is the step that leads to the actualization of Value Based Pricing.

You must refashion company policies, procedures, and systems to make Value Based Pricing work every day.

Start with these three functions:

1) Internal systems: accounting, invoicing, tracking, reporting–all the data and information collection systems you use to keep track of your business. Contract writing needs to reflect Value Based Pricing. Accounting must recognize value outcomes, not inputs. Invoicing systems must be set up to send an invoice the instant a value based free agreement is signed and entered into the systems. Tracking ARs needs to recognize short term due dates and alert the providers when a payment is made so the work can begin.

2) Marketing: every single word you put out into the public marketplace must reflect that your firm stands for value delivered. You’ll have to examine all your print, digital and electronic communications to ensure the great message about value based pricing is clear and not contradicted by input or features-focused messaging. Your marketing and sales departments or individuals needs to thoroughly understand the new language of Value Based Pricing and use it everywhere. Your customer service department need to ensure that they’re fully versed on value, not inputs.

3) Strategy: Strategy is an articulation of the value delivered for a specific profit. Your strategy perspective has to be that profit is required for every sale. It’s not what is left over after expenses.

The challenge companies face when phasing in Value Based Pricing is to overcome their habit of estimating how many hours a particular line of work will take, the hourly rates assigned to the provider, and the amount left over that that will be considered profit.

Your P&L has to stop tracking hours and start tracking value.

What’s It Worth?

Is all of this effort worth it, especially when everything seems to be working with your current hourly billing pricing model?


  • You don’t want to increase profitable revenue,
  • You don’t mind being competed against on your hourly rates,
  • You can ignore the reality of the ethical conflict of hourly billing,

then no, implementing Value Based pricing isn’t worth the effort.

If you want to lay the foundation for faster growth—both revenue and profits (EBITDA) you will:

  • COMMIT (Step 1)
  • PREPARE (Step 2)
  • and ESTABLISH (Step 3) Value Based Pricing.

Your clients benefit, your company benefits and you, the owner, benefit.

Step 3 ESTABLISH, is the practical internal manifestation of Value Based Pricing. It may take a couple of months, and then it’s done forever. What are you waiting for?

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