Michele Riffe - Finding the Right Business Model
One of the things that Ron had me do was create a script, or at least start thinking about how to respond to that question, "What do you charge by the hour?" I am confident now, and I've actually done it a number of times.
I belong to a BNI Chapter, which is a networking group. One of the things that I presented at the meeting was what do I sell. Everybody responded with, "Knowledge" and I thought, "Yes, this is working." Then we talked a little bit about what do I charge by the hour? A lot of them went, "You don't," and I went "Yes!"
I do a needs assessment now, and we focus on why they called me in the first place, and then the value that I bring to them is my ability to help them solve that problem. It's the outcomes that they're paying for, not my block of time.
When I realize that a customer isn't a good fit, I used to think that that was a bad thing and I would pound a square peg into a round hole. I don't feel like I need to do that anymore. I feel confident enough in the services that I offer and that my pricing is solid, that I don't have to always work with just anyone that calls me.
I have had an opportunity with one particular client to use and practice the value pricing conversation, as well as the actual fixed-price agreement and also the payment arrangement. We outlined the game plan so to speak, or the phases of the project, and we have a check-in meeting once a week. We follow up on where are you at? What are we doing? What are we working on? What else do you help from from me? What are your questions with the homework that I left you with from the last time we spoke? It's just a different level of interaction with my customer.
I think the thing that has surprised me most about the value pricing journey is how much I want it to work. It is so liberating to not worry about money. What I mean by that is, we have the conversation, we make the arrangements for payment, and the payment and the price is not the primary focus or issue anymore. The solutions, outcomes, and work are the focus. That has been so joyous.
My next goal is to only accept and work with new customers that fit my business model.
My next question to Ron is how do I transition my existing clients to value pricing? Should I even transition them? Should I primarily focus on just implementing value pricing with any new customers coming into my firm?
Value pricing has been a disruption to my business, because I'm spending the time learning it, implementing it, practicing it. But ultimately I know that down the road value pricing is definitely the model that I want to have in my business.