How Creative Service Begets Proper Pricing

Timesheets

As professionals, we clock time, add it up and create a price out of it. That is one of the most non-strategic things I’ve ever heard of! Our profession has priced our services based upon the labor used to make that tax return for so many years that we think any other way is simply impossible. Well, it’s not only possible, but it is also freeing … to you, your team and your customers!

Using the new C.O.R.E. service example earlier, you simply cannot create such a cool service the customer finds such huge value in and then bill the customer by adding up the number of hours it takes to make it. What if your work generated an additional $150,000 in profit for the customer? Shouldn’t you share in that? A service like this could be two, three or four times what it took to make it. Better yet, it should be a value that you and the customer agree to up front before you start the work. But if you add up the hours, you may only charge $3,000 to $4,000 for the whole package.

“But Jason,” you say, “my clients would never pay more than what it costs to make the service!” I have to refer to Blumer Truth #1: Customers will pay more than they say they will pay. They even surprise themselves, and pay more than they ever thought they could or would! Why not do them a favor and relieve them of their money if they agree to let you have it? It’s your duty! Ha!

So based upon our Daniel Pink enlightenments, you must be creative by making new services and properly pricing for them based upon the value to the customer, not your timesheet. As usual, I hope I’ve made you mad enough or challenged you to question what you are currently doing and try to change.