Hector ran a webinar on 09/23/2016 @12pm EST (sponsored by Intuit) called: Pricing your Accounting Services with QuickBooks Online and Wholesale Discount
Large part of Hector’s inspiration for transitioning his practice to Value Pricing comes mostly from the works of pricing and value legends like Ron Baker, Paul Dunn, Dr. Reed Holden, Robert Cross, and others… In a recent interview, Hector had with Ron Baker about the transition to value pricing in the profession:
HECTOR: “Looking back in the past 15 years, since your book The Firm of the Future: A Guide for Accountants, Lawyers, and Other Professional Services, what would you say is the most important lessons to learn from your book that still stand very well today?”
RON: “The most important idea in the book was the new business model we offered; Instead of the 100-year-old “We sell time” business model of: Revenue = People Hours x Efficiency x Hourly Rate, we posited a better model that comported with the knowledge economy that professionals have operated in since the late 1950s: Profitability = Intellectual Capital x Effectiveness x Value Price
The biggest insights from this new business model are: Customers must make a profit from every interaction with a firm, hence when we write profitability, we mean lifetime customer profit, not just firm profit. That Professionals leverage intellectual capital, not time. That Effectiveness always and everywhere trumps mere efficiency, and that effectiveness is what generates true competitive advantage, since competitors can copy efficiency gains (including technology). Finally, that businesses have prices, not hourly rates, and professionals should price according to value and outcomes created, not time spent.
I think the book has held up very well, since most firms haven’t caught up with it’s business model (including adopting Value Pricing and trashing timesheets), though progress has definitely been made. Paul and I changed the language in the profession, which is the first phase of deep transformations.”
HECTOR: “What do you think is the next evolution of The Firm of the Future?”
RON: “What’s now being taught as the Firm of Now is basically the same things the profession has been hearing since the 1990s—the required move to business advisory services. Sure, the Cloud and other technologies are driving some of this, but at best this will merely increase efficiency, not change the nature of services, unless firms make a conscious investment in new offerings. We suggested in the book the idea of an Innovation Revenue KPI: that is, what percent of your firm’s revenue comes from services that weren’t offered 3 years ago? “
HECTOR: “Finally, how are the advanced of technology and the cloud going to affect our profession?”
RON: “The professions need to pay very close attention to technological developments in the field of AI, deep learning, machine learning, and perhaps most threatening, blockchain technology. These will change the relationship customers have with all professions, shrinking the influence of the professions and placing more power in the hands of the consumer. I do believe we are advancing into a post-professional society, and since economists don’t much like monopolies I think this is a beautiful thing.”
This webinar contains some of Hector’s personal experiences with transitioning to value pricing and his learnings in the process of applying different techniques and knowledge from all the thought leaders in the areas of pricing professional services.
Download PDF Guide of the webinar: