This story from Bev, one of my students in the Value Pricing Academy, is a great example of not pre-judging or making assumptions about what a client wants and values.

I began a few months ago letting one of my better existing clients (and primarily her office manager) know that I would be moving from an hourly billing rate to a fixed price. I thought that I would merely continue to use a cost-plus model, raising my rate 20% to what I thought was a reasonable fixed rate for her. 

However, inspired by the recent teachings by Mark Wickersham and Teresa Slack, I decided to go all in, and put together 3 packages using what I've been learning from them both and implementing with the Effective Pricing software. 

I'll admit that I'm still a bit hesitant about using the software with a client, so I simply put together a one-page brochure and presented that to her. I suspected that she was more value-sensitive than price-sensitive, so I loaded up the premium package with some reporting features that she had previously mentioned wanting, but that I hadn't yet provided her with. 

Using the new Effective Pricing software on my own, I came up with prices for each package, based more upon value than time. The Essential package was priced just slightly higher that what she had been paying, but the Full package had the same features that I have been providing to her. 

When I presented the three options to her, she wasn't quite sure which package she wanted. She seemed to be leaning toward the premium package but was uncertain about the price increase. I left her to think about it and made arrangements to meet with her in 2 weeks. 

When we met today, I presented her with some of the reports that she had asked about which are in the Premium package. Once we were done going over her financials together, I brought out a Service agreement and asked her which package she thought would work best for her. She said - "I thought that we were going with the Premium!" 

It was a slam-dunk. And the best news is that she has a second company that I also help her with, and she signed up for the Premium package for both of them - a total increase of 42%.

Bev Peltzer, Perfectly Balanced

17 September 2020