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« Need cash now? What small business doesn't? | Main | Knowledge is power »
Saturday
Jul182015

Pricing on Purpose, Creating and Capturing Value 

by Ron Baker

I watched  Mr. Baker's interview on the National Advisor Network's live stream from New Orleans at their recent conference. I really thought he had a good premise, that the Art of Pricing was where you could improve your profit, not the cost cutting everyone looks at first and which was probably already factored.

What was the meaning of value?  Could we figure out its price and use strategies to improve our profit by billing at what people perceived it was, rather than a backwards look at cost per hour?

What I saw was a very animated and interactive interview with a person I thought had information I needed.  So to that end, I purchased his book (named above).  I wanted to learn more!

The book is a rather large tome of information unlike his direct approach in the interview. He believes you have to know all the history of where an idea or theory came from to go forward. Wish we could see that in shortened version though, like cliff notes.

To be fair, I'm only 1/3 of the way through.  I have highlighted several comments, like this one: "the company explicitly understands that its price determines its costs, and doesn't let the costs dictate the price", and " Modern firms are knowledge organizations, and it is time for them to begin acting as if they understood this fact".  He has strong opinions;  I like that.   He goes on to say that effectiveness is what we should be paid for, not efficiency and a company only exists to create wealth for its customers and should be judged on this alone.  Do our clients understand how we are doing this for them?

He certainly is not a proponent of the hourly rate- something we agree on totally as every new client inevitably asks us, 'and how much do you charge per hour"...and off we go to explain the value added approach we have used since inception in 2007.

What I'm trying to glean is what strategies can I learn about pricing, to make it easier for our clients to understand our true value and pay accordingly. It goes without saying, everything I learn for our own company, we use to help our clients do the same with their customers.  I know that value, not cost must determine price, but the bad 'hourly monster' still resides in hiding in my mind sometimes. Help me explain value to others in a very succinct way and I will be happy I purchased your book.

I'll get back to you when I'm done reading...I really do think he's on to something I want a piece of.  Just trying to get to that has been a bit hard. The book reads like a college book, and I wanted a simpler version.  Maybe Ron will read this blog and come out with the Pricing on Purpose, Creating and Capturing Value for Dummies book this year. 

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