Getting Paid for Value Instead of Time
Ignition works with professional service firms to help them adopt new compensation approaches based on the value they create rather than the hours they work.
Making the transition to a value-based compensation approach requires a change in thinking as well as a change in practices, so this program begins with a combination of both onsite and online workshops and training sessions. In addition to educating the senior management team, we’ll work with you to establish what we call a “Chief Value Officer” or a group of individuals called the “Value Council.” This is a key component of making pricing a core competence of the agency. Much of this program is focused on helping this individual or group deploy new pricing and compensation practices within the organization.
Drawing upon Ignition’s extensive work in value-based compensation, including work with the AAAA, ANA, IPA, and agencies worldwide both large and small, we provide training, coaching, and advice in the following areas:
- How agencies create value and why they should get paid for it
- What business agencies are really in, and what clients really buy
- The chronic disadvantages of hourly billing
- Why the current client-driven system is not in the client’s best interests
- Improving agency profitability by improving your pricing instead of just cutting your costs
- How to sell your value instead of your costs
- How to align the economic incentives of agency and client
- Pricing individual services based on value instead of cost
- Selecting the profit-optimizing price for each engagement or service
- Issues to consider in responding to
- Request for Proposals (RFPs)
- Dealing with client price psychology and overcoming pricing objections
- Applying creativity to pricing
- Tiered pricing and the importance of options
- Putting “scope of value” ahead of “scope of work”
- Identifying the drivers of brand success
- The key factors to consider when setting a value-based price
- The concept of the value scorecard
- Why good and bad ideas shouldn’t have the same value
- Why and how IP ownership affects pricing in value-based agreements
- Creating new sources of agency revenue, including developing your own intellectual capital
To review some of Ignition’s work in this area, we invite you to review some of the published articles by and about Ignition associates in leading business and trade publications including Advertising Age, Admap, The Advertiser, Communication Arts, The Economist, Bloomberg News, the Wall Street Journal, and The Guardian.
To learn more about how Ignition can help your firm make the transition from cost to value, please contact Tim Williams at twilliams@ignitiongroup.com or 801.582.7297.
Questions or feedback? Contact us.
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