Why You Should Use Value Based Fees

There’s a lot of talk about value based (aka fixed fee) fees. Listen to this three part series from a practioner who took his practice from waiting 180 days to be paid, not making money and wanting to give away his clients because they were so unprofitable.

Today this participants greatest fear? That he hasn’t priced himself high enough.

Here’s the second part

And the final segment – featuring a lot of Q&A from the audience:

If this is of interest – you may also want to attend the Sage Firm of the Future Symposium August 23, 2010 in Texas.  Hosted by Ed Kless this session (free to Sage Select business partners) will discuss pricing issue such as those shown above – and feature a presentation from Sage Partner John Shaver who has adopted these principles.

The real key to the session won’t be the lectures — but the open Q&A which will be available through each day of this two day session.

Firm of the future symposium and  Alan Weiss – Summit Consulting

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Comments

  1. Wayne, let’s be sure to make a distinction between “value based billing” and value-based or fixed pricing.

    Using the word “billing” implies that the customer is made aware of the price after the work has been completed.

    Whereas “pricing” means that the customer is given the price (usually with options) upfront before the work is started and before they commit to anything.

    Upfront pricing (as opposed to billing or, better yet, hidden pricing) gives the customer control over whether or not the project has value to them and allows them to budget the price of the project.

    • Agree 100% — the old title of this post was “Value Based Billing” and I’ve changed the wording to be “Value Based Fees” which matches the title of the video. Thanks!.. too early to be writing this stuff…

  2. “Fixed fee” pricing is not the same as “value based” pricing. The former is establishing a set price that will be paid for the work and is usually contrasted with time and materials (a.k.a. hourly). “Value based” is effectively a commission on the revenue or savings that result from the work. Unlike fixed fee pricing, value based pricing may vary with the actual results.

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