Value-Based Pricing & Your Professional Services Brand Promise
Sweat poured off the face of my mover.
Each breath, heavy as he schlepped another thing up to my newly leased (4th floor walkup!) apartment, looked like it was about to be his last.
It was hours past the time when my movers should have wrapped up and been long gone, but there he was, pausing on the staircase once again, on the verge of passing out.
If you don't have your revenue operations in order, it gets challenging to fund your business systems and profit growth (or your lifestyle growth).
Plus, the whole purpose of business operations is not about efficiency or even "keeping the lights on."
(Anyone telling you that is missing the forest for the trees - even if the trees feel like a looming jungle some days that you're trying to cut through with a teeny tiny weed wacker.)
Business Operations is about delivering on the promise made in your marketing, branding, and sales efforts.
And research shows that firms with strong internal service quality and operational execution see higher customer satisfaction, loyalty, and profitability.
So what's the value of your services?
Said another way, what are your clients actually paying you for?
HINT: it's not actually your time.
What Your Clients Want and Value
My life was in upheaval. I had to get through two moves in less than 7 days.
(0/10 do NOT recommend).
The deadline was now looming. And I still hadn't hired out for move #2.
An entrepreneurial mover for job #1 saw an opportunity.
"I can do your next move. I'll charge you half the rate."
I was a young, newly single mom... It seemed serendipitous and I needed my time back.
So I went for it.
Long story short... he brought his less-than-fit, no-longer-young buddy along and what should have been a 4 hour move with a professional crew turned into 9 excruciating hours.
Which I was on the hook to pay for... in cash.
Needless to say, the professional moving crew would have been far far less expensive, faster, and heart-attack-free.
What your clients want and value fall along the lines of these three angles
These three angles of time, cost and quality are considered the “iron triangle” of project management, a foundational concept in professional services delivery. And the reality is... optimizing for two often leads to sacrificing the third.
Any one of us, including your clients, would love all three, but instead...
Despite wanting it all, 2 out of 3 is more realistic.
And some engagements, like my movers, turn out 0 for 3.
Capturing Clients & Profit With Value-Based Pricing
The key is figuring out which of the 3 your ideal clients value the most.
Value-based pricing then reflects the value of what you provide, in their terms.
This may still be the total time to completion but recognize that less time spent often equals higher value, not lower.
(Do you really want the dentist taking 5 hours to pull that tooth?)
When means, it's not your time spent that measures it all.
Value-based pricing is the method of setting prices based on the client’s perceived value rather than your internal costs or hours. And it is proven to increase profitability and client satisfaction in B2B services.
And when a client says "that's too much money", they often don't mean you are charging too much. They mean that the value in what you're providing...
Based on their priorities of time, affordability, and quality...
Is less than what they expect to pay you.
As Seth Godin says:
"The reason it seems that price is all your customers care about is that you haven't given them anything else to care about." [Emphasis mine.]
Bringing Pricing and Value Together Through Professional Services Operations
I assume you aren't like my movers.
You back up your sales promises with genuine deliverables.
But do you truly understand the value of those deliverables (not just the value of your time)?
Taking it a step further...
When you sync up the value your clients truly want from you through optimal pricing with the quality, consistency and scalability of work you do to deliver that, you can see measurable increases in client retention and profitability.
And it comes by also supporting your profit, self-funded growth, and more with the right operational model and strategic execution.
Most client wish they did this sooner.
Start today by scheduling an initial consultation and exploring whether fractional operational support would help you price higher and scale better, supporting client value and business growth the whole way through.
