Value Pricing: There’s a Storm Coming

It’s amazing how a seemingly simple phrase can evoke strange comparisons and imagery in your head.  Exactly that happened to me this week as I began reading……get this…..”Implementing Value Pricing – A Radical Business Model for Professional Service Firms”.  Scratching your head yet?

Several weeks ago, I joked about doing some “light” reading and really diving deeper into the concept of Value Pricing and true Contract Billing, where a clearly articulated contract spells out the value and price of the service our firms provide their customers.

At the time, I’d been reading various blogs, articles and other items I came across on the internet and decided it was finally time to dig deep and read this book by world renowned expert Ron Baker.   It was a quote in the Chapter 2, not even into the real guts and specifics that stuck me.  And, it wasn’t even a quote from Ron; it was from John A Shedd in the late 1800s to early 1900s.  The quote said “A Ship in harbor is safe – but that is not what ships are for.”

The harbor isn’t always the safest place

I was immediately transported to October 6, 2016.  See, I live as the crow flies about 40 miles from the Atlantic Coast, near scenic Savannah, Georgia, Hilton Head Island, SC and Charleston, SC, and 2 Hours from Jacksonville, FL.  A monster storm was bearing down on us.  Hurricane Matthew was coming to a part of the country that hadn’t received a direct hit from a major Hurricane for the better part of a decade, for Savannah and Hilton Head, the better part of almost 3 decades.  I remember watching the news, hearing about folks trying to secure boats for the storm.  I also remember hearing about the military moving boats OUT TO SEA to protect them better from the storm.

That’s what struck me about the quote.  Boats are safe in harbor, under normal circumstances.  There were a group of folks who knew with this storm bearing down, that the harbor, wasn’t the safest place.  The images after the storm were devastating as you can see above.  Hilton Head and Harbour Town were devastated, and are still recovering.  From the devastation came learning for our area that we will remember when the next storm comes. I was also reminded that there are few things more beautiful that the power of the sea and storm and the extreme calm and beauty after the storm.  It was a poignant reminder to appreciate everything my family has and do everything I can to grow and protect what we have.

In the path of a storm

It struck me, the Accounting industry is in the path of a storm, actually more than one, but we’ll focus on one today.  The storm is Value Pricing (or true Contract Billing).  Many, many firms have docked their boats safely in harbor, thinking because they’re tied down like they’ve always done for other storms and changes in the industry that they’re safe.  They’re not learning from the storms in other industries and innovating, leaving the safety of the harbor.   Boats are not at their biggest value or safest in harbor.  They are most valuable when out to sea, maximizing their potential and value.  Sitting in harbor, they are vulnerable, not maximizing their potential and utility.  I see the same in professional service firms, we’re not safe in harbor, we need to get our to sea, doing something more than just the basics for our customers.

So, over the course of the next few weeks, I’m going to keep reading about how to prepare for the storm as I dig deeper into “Implementing Value Pricing”.   I hope you’ll come back and join me as I blog about my findings.  I certainly claim to be no expert, but the topic is important to me, and I want to hear if it’s important to you.  Have you been thinking about this? What are your questions?  What do we need to be doing to help you?  Join me on this journey as I educate myself on how to prepare for the storm, observe and appreciate its beauty, and see the sunshine on the other side.

CCH Axcess Practice can help your firm weather the storm. Learn more.

 

AUTHOR

Samantha Grovenstein-Deal

All stories by: Samantha Grovenstein-Deal
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