The call came one afternoon just after I had completed training to talk about Value Based Pricing, including responding to objections (Step 4). I declared we were ready to implement Value Based Pricing. We’d done the phase-in work: Commit, Prepare, Establish and Train. Now it was time for implementation.
The Senior VP of Business Development for a small federal contractor needed an expert to prepare his team for a bid that would be worth $1.15 billion to the winner.
We spoke for a long while, establishing that I would be a great fit for his team. Near the end of the conversation he asked, as buyers always do, about my fee. I said that my company bases our fees on value delivered to the client, and I would send him a proposed engagement letter first thing in the morning.
I held my breath as I waited for his answer. He simply said, “That would be great.”
I worked with his team of 37 subject matter experts and they delivered a near flawless proposal and Oral presentation which catapulted them into the big leagues.
Your Firm Can Do the Same
Your firm can absolutely do the same. If your revenue is generated from your knowledge and expertise, you are perfectly positioned to implement Value Based Pricing.
Step 4 TRAIN is the step that transitions your company from the internal phase-in steps to the external ones. In the TRAIN Step you role play every possible conversation you might have with a client or prospect.
Here’s the best part: you already know what the clients will say! Yes, these role play practices rely on how your clients typically express themselves. You don’t have to make anything up.
Start with the top ten existing clients. Gather anyone who has worked with them and discuss how these clients typically talk, what they care about—their needs, wants and desires—and you’ll start to quote them.
Imagine a conversation using these quotes. And how you could respond during the conversation you have with them about how Value Based Pricing helps them meet their needs and wants more quickly and get value beyond that to help them achieve their desires.
Everyone on your team should take turns as the client and the provider. Do not rush through this! The role playing embeds the positive and exciting new opportunities in your head, so they are at the tip of your tongue when speaking with clients.
You are likely to hear objections–not because Value Based Pricing is bad but because it is unfamiliar. List the top client objections and practice mitigating them.
Let me emphasize here that your goal is not to ‘overcome’ objections but to mitigate them or reduce them, so the client lets them go. Role playing the objections conversation will help instill in your team the importance of working to mitigate objections and to resist the temptation to overcome them.
You also have to train for the occasional client who refuses no matter what to work with your Value Based Pricing model. This is disappointing, because Value Based Pricing is so advantageous for clients, but it will happen. Graciously offer to give them some time to think it over, and if they still refuse, offer to refer them to another provider.
Value Based Pricing for the Long Term
Value Based Pricing is not just for the current moment. It is for the benefit of your clients and your firm for the long term. Once you have implemented Value Based Pricing you will never look back. The clients who appreciate high value and quality, delivered with speed commensurate with that quality will turn to you to address every future need, want, or desire.