In the simplest terms, value pricing is about pricing your services according to the value received by the client and not the hours spent on the work. Making pricing for value a core competency for everyone in the team is key to success, which starts with knowing what your clients want.
That means building a culture where the whole team create, comprehend, communicate and capture the value of the services you provide to your clients. With everyone sharing this same mindset you set the best possible foundations for adding value.
The 4 Ps of Marketing
A great way to begin that process is by having a team meeting to discuss the ‘Four Ps of marketing’, the basics of any marketing strategy:
- Product – what you sell to the client; in this case, your cloud services
- Place – where you sell these services (online, face-to-face or at events etc.)
- Promotion – how you advertise your services (social media, digital marketing etc.)
- Price – the fee you charge for the delivery of your services
More specifically, it’s important to have an open discussion on how your firm will position itself in the market to create and communicate:
- What your firm does,
- Who your firm serves, and
- How the client will perceive value through the prices your products/services command.
Marketing demands that you look outside the organisation. All of the above Ps says something about your firm: who you serve, what you do, how you do it and, most importantly, how you perceive yourself. In the final analysis you need to ask one key question:
“What do our customers value, and how we can increase that value?”
Throughout the process of transitioning to value pricing, you need to keep in mind that each customer must be treated individually, not equally.
And this is where discovery comes into play…
Discovering where Your client perceives value
When you meet with a client, or potential client, you need to go into the meeting with no sales pressure. It’s critical that they feel you have a real interest in them and their business. Also take care to apply your firm’s client selection criteria – and that your client meets these standards.
During the meeting or phone call, make it clear that this is not a sales meeting/call. Instead, this conversation is about understanding their needs and making sure you’re the ideal match.
The next steps are crucial; in order to understand their needs, you need to ask different types of questions – questions that get to the heart of the kind of people and business they are.
The 4 Key Discovery Areas
The Discovery Journey covers four main topics. Building a fuller picture of your client from these angles is essential to getting the best price for your services. The key areas are:
1. Questions about the facts
- Who owns the company?
- What’s the company’s history?
- What’s the organisational structure?
2. Questions about issues
- What are your key frustrations as a business?
- What keeps you awake at night?
- What has prompted this meeting?
3. Implication questions
If the client/prospect talks about a specific ‘pain’ or ‘issue in the business’, probe further to get more info by:
- acknowledging with empathy
- asking them to quantify it
- asking them to quantify the costs of the ‘issue’ or the ‘pain’ continuing.
4. ‘What if…’ questions
- How would your business define success?
- How much do you value this success, and how much associated risk do you perceive?
- What is this success worth to you?
The Essential Value Pricing Discovery
Make sure you get the price you deserve. Download our free guide Pricing Your Cloud Services: Perfecting Value Pricing to start implementing a pricing plan that adds value for your clients and your firm.
The free guide includes:
- Over 50 examples of value pricing discovery questions
- How to create better pricing proposals
- How to review and improve your strategy
Click here to download it now: