A 10 point evaluation of your agency’s pricing progress
January 16, 2013 | Author: Tim Williams
If you’re one of the many agencies who have set a goal to get paid for the value you create instead of the hours you work, here are 10 questions to help gauge your progress.
Rate each question on a scale of 1 to 10, where 1 equals “strongly disagree” and 10 equals “strongly agree.”
- We have changed our internal dialogue and language away from cost and time toward value and outcomes.
- We understand that our primary job is to be effective, not efficient, and we work to reinforce this concept with our clients as well.
- We now consider a variety of different compensation options instead of just defaulting to the concept of selling our time.
- We have made pricing (not costing) a core competence of the firm.
- We have shifted our attention away from internal measurements (time, labor, staffing plans, etc.) to external measurements (marketing outcomes, business results, shifts in consumer attitudes and behavior, etc.).
- We regularly precede discussions about scope of work with a discussion about scope of value (expected outcomes).
- We have traded the time and energy we used to spend managing time for doing a better job of managing scope.
- We price our services based on a set of factors that transcend cost.
- We learn from our experience in pricing assignments in an effort to do better the next time.
- We apply the same kind of creativity to pricing and compensation as we do to solving our clients’ marketing problems.
Now add up your score and give yourself a grade like you would in school. If you got 90 or above, you earned an A. Below 60 is a failing grade. But don’t let a low score get you down; just use it as motivation to do better in the coming year.
If you need even more motivation, here are a few links that may help:
The first step to capturing more of the value your create for clients is to understand how, when, and where value is created.
Why billing by the hour is a sub-optimal way to get paid.
Next time you’re engaged in preparing for a new business presentation, devote 30 minutes to the question “If charging for hours wasn’t an option, what are some of the ways we could get paid by this client?”