A Declaration of Value

If you accept the premise that your firm sells the value it creates rather than the hours that it works, your goal is to commit your senior team to the following “Declaration of Value.”

  1. We will begin each new assignment or relationship with a discussion of Scope of Value before we discuss Scope of Work.
  2. We will price our services based on the value we provide rather than the hours we work.
  3. We will stop costing and start pricing.  Costing is a science; pricing is an art.
  4. We will start charging different prices to different clients at different times based on the value to that particular client, not the cost to the agency.
  5. We will charge more for high-value services and less for low-value services, regardless of the time or cost.
  6. We will commit to devote the same level of creativity to pricing and compensation as we do to solving our clients’ marketing problems.
  7. We will never lower price without also subtracting value.
  8. With more sophisticated clients, we will show enough confidence to accept some risk in our compensation arrangements.
  9. We will view each new client relationship as an opportunity to experiment with (and learn from) value pricing.
  10. We will never enter into a pricing discussion that we’re not willing to walk away from.

Nothing can change the dynamics in a client relationship more than moving away from a cost-based compensation system to one that is based on value.  It gives the firm the incentive to think and be more proactive.  It helps focus and prioritize the time, energies, and activities of both parties. It infuses the relationship with a higher level of trust and mutual respect, because firm and the client are both trying to achieve the same outcomes, with the same level of risk and reward.  

Questions or feedback? Contact us.

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