Comments on: Ready to let customers set your prices? http://revenueorchard.com/2009/04/15/ready-to-let-customers-set-your-prices/ Ideas & Musings on BtoB Revenue Growth Tue, 15 Jun 2010 23:36:24 -0400 hourly 1 http://wordpress.org/?v=3.0.1 By: lshirman http://revenueorchard.com/2009/04/15/ready-to-let-customers-set-your-prices/comment-page-1/#comment-20 lshirman Mon, 20 Jul 2009 17:55:45 +0000 http://btobrevenue.wordpress.com/?p=126#comment-20 Fmersk, You are right that Khalsa's and others' (Alan Weiss, for example) concept of value-based pricing is optimal. Its a collaborative effort that creates value even in the pricing process itself, by identifying specific and measurable objectives. Unfortunately, many clients either can't quantify the likelihood of long-term results, or more frequently, can't allocate the investment up front for value that will be accrued over 3 to 5 years. To overcome the uncertainty, Accenture and other big firms have tried tying the actual price paid to actual results, with mixed success. Fmersk,
You are right that Khalsa’s and others’ (Alan Weiss, for example) concept of value-based pricing is optimal. Its a collaborative effort that creates value even in the pricing process itself, by identifying specific and measurable objectives. Unfortunately, many clients either can’t quantify the likelihood of long-term results, or more frequently, can’t allocate the investment up front for value that will be accrued over 3 to 5 years. To overcome the uncertainty, Accenture and other big firms have tried tying the actual price paid to actual results, with mixed success.

]]> By: F Mersk http://revenueorchard.com/2009/04/15/ready-to-let-customers-set-your-prices/comment-page-1/#comment-19 F Mersk Mon, 20 Jul 2009 17:38:38 +0000 http://btobrevenue.wordpress.com/?p=126#comment-19 For professional services such as consulting this is typical problem: setting prices, determining value, asking for the fair value, etc. I like the way that value is established in Mahan Khalsa's book, "Let's get real or let's not play". He offers a way that he used working at a large consulting where first you establish that is a measurable problem that needs to be fixed. Then you determine the value of fixing the problem. The value is now clearly established so then spending $300k to fix a $30M problem (over 3-5 year total value) becomes moot point. I am in sales - I loved this book. Too many consultative sales do not practice this way of doing sales. Perhaps because they are not professional consulting salespeople. I am. It gets to the heart of the matter. And in the end gets the price is much higher than expected. Furthermore this established a basis for repeated projects and referrals. Cheers, FMersk For professional services such as consulting this is typical problem: setting prices, determining value, asking for the fair value, etc.

I like the way that value is established in Mahan Khalsa’s book, “Let’s get real or let’s not play”. He offers a way that he used working at a large consulting where first you establish that is a measurable problem that needs to be fixed.

Then you determine the value of fixing the problem. The value is now clearly established so then spending $300k to fix a $30M problem (over 3-5 year total value) becomes moot point.

I am in sales – I loved this book. Too many consultative sales do not practice this way of doing sales. Perhaps because they are not professional consulting salespeople. I am. It gets to the heart of the matter. And in the end gets the price is much higher than expected. Furthermore this established a basis for repeated projects and referrals.

Cheers,
FMersk

]]> By: lshirman http://revenueorchard.com/2009/04/15/ready-to-let-customers-set-your-prices/comment-page-1/#comment-18 lshirman Fri, 01 May 2009 20:08:51 +0000 http://btobrevenue.wordpress.com/?p=126#comment-18 Laura, You make a great point about the importance of understanding your own value and having the confidence to claim it. My assertion, so far proved out, is that once you have the ability to do that, the next step is to demonstrate that value so effectively that informed clients will lead the way in raising your prices for you. Laura,
You make a great point about the importance of understanding your own value and having the confidence to claim it. My assertion, so far proved out, is that once you have the ability to do that, the next step is to demonstrate that value so effectively that informed clients will lead the way in raising your prices for you.

]]> By: laura http://revenueorchard.com/2009/04/15/ready-to-let-customers-set-your-prices/comment-page-1/#comment-17 laura Fri, 01 May 2009 16:14:18 +0000 http://btobrevenue.wordpress.com/?p=126#comment-17 I feel your pain with setting prices. I have tried to get clients to tell me what they think, but they are very hesitant. I think WE have to get more comfortable with our value. We pay lawyers hundreds of dollars an hour and they give us NOTHING but their time/consultation. We do not walk away with an ad or a plan. Maybe we get a Last Will and Testament. But basically it is their expert opinion we get. But no one bats an eye at the lawyer hourly fee. And what we do is revenue generating. We drive sales and ROI. We should not be beaten up by clients over our rates not feel apologetic for those rates. Ideas are currency. You don't ask the cobbler how many hours it took to make the shoes. You buy 'em because you love them. I say we set the price and we feel confident in doing so. I feel your pain with setting prices. I have tried to get clients to tell me what they think, but they are very hesitant. I think WE have to get more comfortable with our value. We pay lawyers hundreds of dollars an hour and they give us NOTHING but their time/consultation. We do not walk away with an ad or a plan. Maybe we get a Last Will and Testament. But basically it is their expert opinion we get. But no one bats an eye at the lawyer hourly fee. And what we do is revenue generating. We drive sales and ROI. We should not be beaten up by clients over our rates not feel apologetic for those rates. Ideas are currency. You don’t ask the cobbler how many hours it took to make the shoes. You buy ‘em because you love them.
I say we set the price and we feel confident in doing so.

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