It’s always a funny comment when someone makes it. You say “Well I assume…” and the other person in the conversation chuckles and says, “You know what they say about assuming…” As I was continuing my read of Implementing Value Pricing by Ron Baker, I kept finding myself going back to a central theme, no matter where I was in the book. Value Pricing is as much about setting expectations as it is money and price. A particular quote continues to stick with me:”There is a difference between getting what you pay for and what you hope for.” In order for value pricing to work, and be mutually beneficial and successful, you can’t hope. You can’t assume.
I think we’re on the same page…
As a professional service business, it’s your job to understand the customer’s expectations up front. You’d think that it was a given that our industry does this. But sit and think about the last new customer you took on. Do you think both of you walked away from the final meeting perfectly on the same page about the service you would provide, the value it provided, and the price the customer would pay? Be honest. Don’t assume you were on the same page. Replay the conversation in your mind. What would your customer say if some neutral third party were to ask them that same question?
It’s really important not just to think you understand your customer’s expectations, but to clarify those expectations with the customer, and document those expectations in the form of a contract. The contract is the essence of expectations between you and your customer. Before you even think it, I’d argue that contracts are important well beyond the scope of where we use them as an industry today, which is primarily for Attestation work where we are required to have a “engagement letter.” We should have a contract for everything if only for legal protection for us and our customer.
So I changed my mind… again… and didn’t you know?
Things change. People change their minds. They decide to go in a different direction. Business environments and circumstances change. Your client’s strategy could change… Scratch that… Your client’s strategy should change. And guess what? That little contract your wrote needs to be updated to reflect those changes.
What’s that you say? You only talk to your client once, maybe twice, a year? Oh, you only talk to them as little as necessary, because you know, .25 hours, every time we’re on the phone, or 1.25 hours for every meeting. Guess what? You’ll never have a clear, ongoing picture of your client’s business and their expectations if you stay in the mindset that the hours drive the cost and the price. The customer will continue to be afraid to call, or show up, or sit down and talk with you like the expert partner you should be, if they don’t know what it will cost them, or how it brings value.
I suggest implementing “Meetings With No Strings Attached” where your customer can be free to talk to you about anything going on in their business. And you can feel free to ask whatever you need to that will help you better serve that customer. So I guess, some strings attached. You need a recurring time and place, with the expectation that the meeting will reset expectations if necessary. Sometimes the meeting will confirm that things are going well – no new action items on either side. Other times, new business problems and goals will be uncovered which will lead to change orders to the contract. Allowing the contract to be a living document will be crucial to managing the dynamic expectations of your customers.
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Previously in this series: