AA 120 | Value Pricing

 

Have you noticed most people would prefer Apple’s products despite their price over other cheaper products? Why do people choose Apple over other brands? In this episode, Ronald J. Baker, the Author of Implementing Value Pricing, shares his steps for firm owners to learn how to value price. The Black Swan Five Program guides the Swans through the theory of Value Pricing. Ronald emphasizes the importance of giving value to clients and how it will greatly impact growing your firm. The deeper you dive into this conversation, the more insights you will learn from Ron Baker. Waste no time and tune in!

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Black Swan Program: Learn How To Implement Value Pricing With Ron Baker

We have a very special guest. Our special guest has been a CPA since 1984. He is a recovering CPA from a Big-8 firm. He is now the Founder of VeraSage Institute, the leading think tank dedicated to educating professionals internationally. He also has a radio talk show called VoiceAmerica.com. He’s been the author of eight books. He’s going to tell you about a couple of them in this episode.

He’s also toured the world, spreading his value-pricing message to over 275,000 professionals. He’s been on Accounting Today’s 2000 to 2007 Top 100 and Top 10 Most Influential People in the Profession. He presently resides in Petaluma, but he also calls it Napa Valley, which most of you might know in California.

Before we welcome our special guest to the show, I’ve been helping accounting, tax, and bookkeeping firm owners have more freedom with their time and money. Get paid first and upfront and confidently charge the fees that you know you deserve. I know that our system works and I know I can help you create the firm you’ve always wanted, but it’s up to you to take that next step.

If you want to explore what that looks like, head on over to TheAbundantCall.com to book your free session with myself and my team. We’re going to talk about three things. 1) Where your firm is at right now and the things that are keeping you stuck. 2) Where you want to go with your firm and your life to ensure you’re paid first. Also, go through all the pitfalls along the way that will save you a ton of money in the process. 3) The exact next steps you can take to double your firm revenue.

Every one of our success stories has started with this call and it’s turned into more confidence, charging premium fees, doubling your firm revenues, eliminating burnout, and feeling excited about the work that you have in your future. Head on over to TheAbundantCall.com if you’d like to explore what that could look like. Now let’s welcome our very special guest, Ron Baker, to the show. Welcome, Ron, to the show.

Thanks, Michelle. It’s great to be back.

Thank you so much for coming back and being here with us on the show. It is a great honor to have you here. For those people that don’t know you, I have done your intro, but it’s always great to hear it from you. If you could share with everyone who you are. Also, you wrote an amazing book, so if you could share a little bit about your book and where someone can find it, that would be great.

I’m a recovering CPA and author of eight books. The most recent one is called Times’s Up!, which is all about the subscription model, which is the topic we talked about last time I was on with you. The book before that was published in 2011, and that was Implementing Value Pricing. That’s something I did in my firm after I left the Big-8 firm that I worked for.

AA 120 | Value Pricing

Implementing Value Pricing: Implementing Value Pricing: A Radical Business Model for Professional Firms

You know how old I am because it was a Big-8 firm, not a Big-5 or Big-4. I started my own firm in 1989 and there was nobody out there on the circuit talking about value pricing or fixed pricing. There were no consultants. There were no books on it, certainly not in the accounting space, but my partner and I thought it was the right thing to do from a customer experience standpoint.

We thought offering certainty and price was a better customer experience. I wanted to be like Disney, FedEx, Lexus, American Express, and all the companies I was studying that delivered phenomenal customer experience. I got into this whole pricing issue from a customer experience standpoint and we implemented it in 1989 in my firm.

We made every mistake under the sun. We didn’t do a lot of things that we should have done, but we put the core idea. It was the right one. The customers loved it because we were no longer charging based on time. We didn’t need to keep time sheets. The team loved that. It was scary as all get out, but that one change changed my life because I realized it works. The customers love it. It allowed us to make more money working less with fewer customers. I started to write about this and teach it. The teaching was like the proverbial fork in the road. That changed my life because then I started teaching consulting, wrote eight books, and went around the world teaching this. I’m attached to this topic.

I’m happy to have you here to talk about value pricing and what you’ve learned since 1989. Also, implementing this not only in your own firm but also through seeing other firm owners implement what you taught, and coming to the surface to share what you teach. Maybe we can talk about the four main changes that a firm could make to go from hourly to value pricing, and how that can make an impact.

I love how you said it. “Offering certainty and price versus based on the amount of time it takes.” I’m a big creature of this. I’m very excited about our conversation. It’s an honor to have you here. I’d love to hear if you could share maybe a little bit about when you were out. I know we chatted a little bit before we started recording, but you did a Black Swan case study, and honing in on what is it that you shared in the four different steps, and how did you see the few flourish? Maybe some of them fail. As you said, you made your fair share of mistakes too.

When I started teaching this, I started to dive into it a lot more and realized the mistakes I made. Hopefully, the people I teach don’t have to go through the same painful process of making mistakes that I made. That’s why we go to experts. It’s a shortcut to expertise. They’ve made all the mistakes probably or at least a lot of them.

The Black Swan Program was something that happened to me when I started working with bookkeepers in Canada. There’s an association up there of professional bookkeepers. It’s now called CPP, which is Canadian Professional Bookkeepers. I went up there and did a keynote. We did a pre-conference session for a full day on value pricing.

It blew the audience away. We were sitting in a bar afterward with the president and the person who invited me. The guy looked at me and said, “Baker, you come to these events, you show up, you throw up great information, you blow people’s minds, and you put them in a state of silence, but how many people implement this stuff?” I looked at him and said, “It’s roughly about 20%. You’re not going to get much more than that.” He said, “What can we do about that?” I said, “Let’s start a Black Swan project.” I was probably reading Taleb’s book at the time, The Black Swan.

You weren’t reading Chris Voss’s Never Split the Difference about the Black Swan?

No. I think that came out later.

This was back in the ‘80s. Just kidding.

It wasn’t that far back. It was back in the 2000s, 2011 or something like that. Anyway, we got sponsors for this program, the software publishers. We admitted five Black Swans and they had to go through an application process. That’s how we found them. They were self-selected. They filled out a lengthy questionnaire about their practice, what their goals were, why they wanted to do with the Black Swan, and why they wanted to do value pricing.

To some extent, they were like immigrants. Immigrants are self-selected and they take risks. That’s why they do so well wherever they land because they are that self-selected entrepreneurial type. We narrowed it down to 5 or 6 per program. The program lasted for six months. We would fly these people to Napa, which is in my backyard. We would hole up in a hotel for two days. We would break bread together, lunch and dinner, and all of that.

I put them through a pretty intensive two-day program about value pricing. All the essentials, all the theory, all the application, why we offer three options, how you fix a price, how you deal with scope creep, and all those things. We would then have group calls a couple of times a month. They would also have one-on-one calls with me to go over specific pricing for new customers or how to reprice an old customer that they had.

Every Black Swan was hourly billing when they came into the program. We put over 60 people through this program over a period of 4 or 5 years because I also ran a couple down here in the United States. Every one of them got rid of hourly billing. Every one of them dropped time sheets. To me, that’s a success all by itself because they stopped equating time spent with value. They became obsessed with value. It touched everything. Pricing touches everything in a firm because it’s driven by your strategy. It’s driven by your positioning.

AA 120 | Value Pricing

Value Pricing: Every Swan of the Black Swan Program rid their hourly billing and dropped timesheets. That’s a success.

 

Let’s talk about that real quick if you don’t mind. How do you stop equating time spent with value? For someone tuning in right now, if we were to break that one element down because like you said, it would be a success if you could stop the time sheets and the hourly billing. If you can put a halt to that piece, what can you share today for a firm owner to take action?

I’d love it if more than 20% of you guys took action on this because I’m all about taking action. Otherwise, I wouldn’t be here and having awesome people like Ron here because we don’t want you to just sit here and listen and go, “That sounds good.” You stop listening to us and then you go back to your day-to-day. What are the steps or what can you share on how a firm owner can stop equating their time spent with the value that they provide?

This is a complex question, Michelle.

I know it is. You might have to go deep into it. I know it is slightly complex.

This is in our DNA. It’s in my DNA.

It’s in mine too.

It’s a process of unlearning and unlearning is brutal. The first thing I would tell people is to go to Google and google backwards bicycle. Watch that seven-minute video of a guy trying to ride a backwards bicycle.

I’ve never even heard of that.

It’s incredible. The guy has a video and a YouTube channel, The Backwards Bicycle. This is an incredible video. This is what we lead with in this course because this is the equivalent of riding a backwards bicycle. Once you can do it, your brain locks in on it. He went back and tried to ride a regular bicycle and he couldn’t do it. It took him over an hour to get back into it. Something in his brain clicked, and then he was able to ride. Now I’m talking about a backwards bicycle, meaning when you turn the handlebars to the right, the wheel goes to the left and vice versa.

Everybody thinks they can do this. Nobody can do it. Nobody can ride a backwards bicycle. I promise you. You’ll fall right on your butt. You won’t even go afoot. He proves this in the video. It’s a funny, hilarious video. That’s what this process is. You have to understand the theory of value. By the way, the billable hour and the timesheet, that’s a theory. If we’re going to replace a theory or try and get you to move away from it, I’ve got to give you someplace to go. I’ve got to give you a better theory. The theory is that value is completely subjective. It has nothing to do with the time that we spend.

It’s made up.

Your hourly rate and all your costs. Your customers could care less about your cost. Nobody cares how long it took to make their car, how much it cost, or how much profit Honda made on their car. They only care, “What’s the value to me of owning this Honda versus the price I’m going to have to pay?” That’s the whole point of value pricing. Both sides make a profit. Both the customer and the accountant make a profit.

When we talk about profit and accounting, we only talk about the seller. When you get into the economics realm and you start studying economics about this topic, and they’ve been all over this for centuries so they own it much better than accountants do, they understand that both sides do a transaction profit. We know this because there’s that double thank you moment when you buy something.

The clerk hands you whatever the item is, coffee or sweater, and says thank you. We say thank you. If only one side profited, somebody should say, “You’re welcome.” Both sides say thank you. Once you understand that value is subjective and has nothing to do with your costs, you start focusing on the value. I’ll give you a quick example, a bottle of water. Coke knows how much it costs to produce a bottle of water. What’s the price of that bottle of water? That’s interesting because that depends on where you buy it.

Once you understand that value is subjective and has nothing to do with your costs, you start focusing on the value. Share on X

If you buy it in the desert, it’s going to be very expensive.

If you even buy it at Costco, a hockey rink, or a NASCAR track, it’s going to be more expensive. That’s fascinating because it’s the same H2O. Here’s the real thing. It’s not the cost, not the price, but what’s the value of that bottle of water? If you’re in the desert for four days without water, it’s worth almost infinite. You’ll trade everything you own for it and maybe then some.

If you’re washing your dog with the same quantity of water at home, now it has a much lesser value. If you’re flooded in your basement with water, now it has a negative value. You got to pay somebody to take it out. Here’s the question. Can accounting explain that difference in value? I’m not talking about the cost. I’m not talking about the price. I’m talking about the value.

Does accounting have anything to say about the value in the desert versus the basement? It’s not a thing because all GAAP does is record transactions of an agreed-upon price after the fact. That’s all it does. GAAP does not have a theory of value. This is why we accountants struggle with this. We try and fit everything into the GAAP framework, assets minus liabilities equals capital. That is silent with respect to value.

This is why when a company pays over market value for another company, what do we call it? Goodwill. Goodwill is the name that we give to our ignorance because we don’t have a theory of value. This is why that theory of value, the subjective theory, is so important. Once you get that and you see how that works, you’re 50% home. Now you can start riding the backwards bike and implementing the strategies that come behind that like offering three options and things like that. That first one is a hurdle.

The first one, you got to stop equating your time spent with value. You need to go watch the backward bicycle video a few times. Was that the start of your two-day conference with these five clients or Black Swans you were talking through?

Yes, it was. We started there. In my book, Implementing Value Pricing, I lay out the eight steps to value pricing. I’ll recite them here for you and we can maybe go through the first few or whatever. One is you have a value conversation with the customer. You’re sitting down with the customer and what you’re trying to figure out is, are they in the desert? Are they home washing their dog? Are they in the basement flooded with water? This is not to take advantage of them if they’re in the desert. We’re trying to build lifetime relationships. You want to know the context and what they’re trying to do. Can you even serve this customer? What are their value expectations?

What do they care about? They’ll come to you just like we, as patients, go to doctors with some type of presenting problem. A fever, a headache, belly pain, whatever. That’s just the symptom. The doctor has to find the cause. We have to find the cause. The customer could be complaining about something, but it could be a reflection of a deeper problem that we can help them fix. We have to have an in-depth value conversation.

In other words, we have to start with the scope of value, not the scope of work. If you went to a contractor and said, “I want you to build my dream house,” he would have no idea what to build. What do you mean by dream house? Is that a McMansion? Is it a ranch-style house? Without an architectural blueprint, he has no idea about the type of materials and all of that.

Start with the scope of value, not the scope of work. Share on X

That’s why we go to architects, and architects ask us questions about our life. The good architects might even live with your family for a week or two to figure out how they entertain and how they live in their house. Where do they spend most of their time? This is how you get to real value. You spend more time uncovering it and talking about it rather than talking about the scope of work or here are the eight things we need to do for you in the next 2 weeks, 2 months, or whatever.

Also, ask your client, “What do you need?” They don’t know what they need. It’s our job to be the architectural designer in order to understand them. Are they in the desert? Are they washing their dog with the water? Are they in a basement full of water? That’s a big misconception that I hear, especially with the clients that I work with at the Abundant Accountant that enroll in our eight-week sales mastery training.

They’re like, “Michelle, I just ask them what they need.” That’s how I do it. I’m like, “I can tell you right now, a person like me, a regular general business owner human, we don’t know anything about accounting. We don’t know what we need.” Just like you said, they go to the contractor and say, “I want my dream house,” but they don’t know what they need. They need to be told what they need based on your expertise.

That’s what’s different about being a professional. The patient understands the symptoms, but the doctor understands the causes. We’re in the same position with our customers. They may come to us with specific needs, but we can go beyond that because that’s just the tip of the iceberg. You have that value conversation with the customer and then go back to your firm and price the customer, not the services.

It’s not so much about piling services brick by brick but pricing the customer and inferring the value. Here’s another tough thing about this. I hate to start with the tough stuff, but we have to because we’re talking about changing a mindset here. The only way I’m going to change your behavior is if I change your mind.

AA 120 | Value Pricing

Value Pricing: The only way to change your behavior is to change your mind.

 

You could change your behavior and that could change your mind. Unfortunately, we can’t do that in a class, a book, or a podcast. I got to work on your mindset first. I got to work on your beliefs. When it comes to value, it’s not a number. Value is not a number. It’s a feeling. Price is a number. Cost is a number. That’s fine, but not value. Value is completely subjective. It can change tomorrow.

I’m sitting here talking to you through an Apple laptop computer that I paid $3,500 for. Why on earth would I pay $3,500 for an Apple when I could buy a Dell, HP, or some other brand for 1/5 of that? It’s because of a feeling. I can’t show you an ROI spreadsheet I did on my Apple laptop computer and why it was worth five times more than the Dell. That’s crazy.

I did it because I have an affection for Apple. I think it’s easier to use. I love it. They’re all feelings. It’s not an ROI calculation. Sure, there are things we can put in an ROI calculation that we can do for our customers like tax savings, increased profitability, save costs, or whatever. There’s also a big part of our work that I call spiritual value, which means it can’t be measured.

It’s that social capital that we have in our firm. We can refer them to experts. It’s that feeling they have that they’re in good hands and they can talk to us. We’re relatable. We have good communication skills. Good bedside manner, if you will. All of those things cannot be quantified numerically. Yet I believe they’re 2/3 to 3/4 of our value. Even that’s a guess. They are significant chunks of our value. If you look at why most people leave accountants, it’s because they don’t feel like they’re being treated well.

It’s all of those things. Pricing the customer means you develop and you price three options. Good, better, best, small, medium, large, green card, gold card, or platinum card. Do you ever wonder why businesses offer us three choices? There’s a good reason for it. They’re trying to let the customer self-select into the value price option that works best for them. Usually, when you offer three options, our empirical evidence on this is about 2/3 to 3/4 of the time, you will sell the middle option. Maybe 10% of the time, you will sell the top option. The rest of the time, you’ll sell the bottom option.

I got a question for you on that. I’m going to challenge you. I have a different philosophy. I do understand that the value is not the number and it’s a feeling and they get to choose. I share with the clients that work with me that you’re going to choose the feeling that works best. It’s like when you go to the doctor. The doctor doesn’t say, “If you have a tumor, we can take out a third of it, we can take out all of it, or we can take out half of it. Which one sounds best to you?”

I’m under the belief that between your spiritual value and between the fact that it’s not a number and it’s a feeling and you get to choose whatever that may be, you choose what is going to solve this client’s problem. Remember, they don’t know what they need. They want their dream house. You’re the architect. You’re going to put it together. Give them exactly what they need.

Especially with bookkeeping or cleanup projects or resolutions, we can’t just choose part of it. We need the whole enchilada. What are your thoughts on that? I understand in their mind, they could come up with three different options, but when it comes to sharing it with the client in the meeting, I am of the mindset and of the teaching where you’re going to choose the number. You’re going to go based on the feeling, your spiritual value, and everything you’re doing for them, and then you’re going to deliver that. Thoughts on that?

I used to think the same thing. If you go back to the very first book I wrote, which is Professionals Guide to Value Pricing, which came out in 1998. I said, “Never offer a Coke to a customer of Pepsi and vice versa. Give them exactly what they want. Give them one option.” I changed my mind because I was wrong. Behavioral economics, customer psychology, how we buy, why we buy, and how we make decisions to buy all say that we humans like choices.

When you put three choices in front of the human brain, the question changes from “Should I work with Michelle” to “How should I work with Michelle.” In other words, we appreciate being given choices. That changed my mind. The empirical evidence for this is overwhelming. I’m quite embarrassed I was wrong about it for a year or two because it’s overwhelming.

When we started offering options to firms and giving them three options, it was amazing. It was very powerful. Michelle, I’m not saying that you’re going to say take out half the tumor. I’ll give you an analogy. The best way I can explain this. We’re not saying you differentiate on the quality of your services. The airlines have to fly the plane safely for first class, business class, and coach. They have to land everybody safe and keep them all alive. Otherwise, it’s a bad strategy to kill your customer. Their quality and maintenance, all of that has to be spot on. You can’t cut corners on it. You can’t reduce it.

You can’t compromise in those areas. You can compromise on the size of your seat and if it lays flat.

You can differentiate based on service. You could say that cleanup. Do they want it next week or do they want it in six months? You can make differentiation options based on that. Time of deliverable. Access to you. Access to your team. Are you going to text them back on weekends? All of those things can be used to differentiate. We have a seven Ts model of what you can differentiate on access to your technology. Are you going to let them into your portal? Are you going to give them access to your educational events? All of these things are services.

I appreciate you clarifying this because I think there’s a big misconception when people are like, “Three options.” No, it’s not three different prices for the exact same thing. It’s like, “Here’s what it is to fly your plane to get the landing perfect, smooth, and with no bumps. If you want first class and you want to get on the plane first, get off the plane first, have your shower, wine and cheese, have your meals, and have everything taken care of for you and get that priority service, then it’s this.” I’m glad you clarified that because there’s a lot of misconception about that. I only have firm owners that want to be first class though.

That’s good because we all have customers that some of them want to be first class. Certainly not all of them, but some people want buy the best and get the white-glove treatment. Here’s the thing, if you never offer a platinum option, you’ll never sell one client. That’s why this makes so much sense. I’ve gotten into arguments about this.

I bet. This can be so fun to argue about.

I can tell you somebody who thinks this is absolutely nuts and has your philosophy of what you told me earlier about giving people exactly what they want, and not giving them options. That’s the founder of GoProposal. I think he’s way off the rails on this. I’ve had exchanges with him on LinkedIn and he doesn’t get it. There’s nothing you can do. I can’t change somebody’s mind. All I can say is go look at the empirical evidence out there. It’s overwhelming. Otherwise, why do so many businesses keep giving us three options if it didn’t work? The Sears catalog did it, for crying out loud, good, better, best. Everything they sold was good, better, best.

I’m all about giving them the best, but it’s choosing that’s the firm that you want. You want some clients that are going to be in general coach seats, and then you’re going to have some clients in business class, and some clients in first class. This totally makes sense. If you just want your clients to be in first class and that’s the service you want to offer because you don’t want a lot of clients to begin with, then that’s okay too.

That’s where I think the subscription model is different than value prices. In a subscription model, you can do exactly what you said. In subscription, I’m not sure you need to give choices. I’m not sure you couldn’t give two choices in a subscription.

I think you could do two options.

That is a completely different business model. I can tell you what you can’t do is you can’t run a value pricing firm and a subscription firm in the same firm. It’s like having two spouses. You can try it, but you’re not going to like the result.

AA 120 | Value Pricing

Value Pricing: You can’t run a value price in a forum and a subscription firm in the same forum. It’s like having two spouses. You can try it, but you won’t like the result.

 

It might be good for a little bit, but it might get a little rocky after.

A brand can only stand for one thing. This goes back to strategy and positioning. You can’t sell Rolls Royces and Chevys out of the same dealership. You’ll not only confuse the customers and the market, but you’ll confuse your internal operations as well. You’ve got to be very clear. These are different business models we’re talking about between subscription and value pricing.

We already talked about subscriptions. Let’s step back. I want to hear about the Black Swan results. I know you had your five people. Going back to the results of what you’ve implemented, I know you have eight steps, and we could probably be here for three hours talking. Firm owners are busy. I know you are because you’re a recovering CPA. I don’t think everyone wants to sit here and tune in to us for three hours. You can buy Ron’s books. Where can they buy all of your eight books?

Amazon. I will even send you a Journal of Accountancy article I wrote on the eight steps of how to implement value pricing in your firm.

To our audience, you’ve read enough books in your career. You read books every week. You’re in webinars. You’re in CE training. You can get all the how-to, but if we don’t change the behavior, as Ron said, then we can’t change the mind. In order to change the mind, we have to change the behavior. What we’re talking about is a shift in mindset and a shift of thinking. It could be like, “This is possible for me too,” and it is. It completely is possible. Back to your Black Swan test of five. Can we continue on that? I’m very curious.

We did this program and it was about six months. We had these group calls where they all shared their challenges, what worked, what failed, and what frustrations they were having. They had access to me for one-on-one coaching where we could talk through a particular client proposal, new client proposals, and converting an hourly billing customer to a value pricing customer. All of those issues that come up.

I remember one of the Black Swans and we’ll call her Jenna. She started out with a $70,000 top line. I forget her bottom line, it was maybe $35,000 or $40,000 solo. I think she had maybe a part-time bookkeeper that helped her do some things, but she was basically a solo. She started embracing value pricing. She offered three options. She even created a diagnostic test that she would put people through and charge them for it.

Rather than giving away the free meeting to interview a customer and see if you’re a good fit, she’d come to the table right out of the gate with something of value, go into their books, take a look around, and put them through this diagnostic checkup. I forgot what she called it, but she had a name for it. It was branded. It was creative.

She doubled in the first year after implementing value pricing and converting her customers to value pricing from hourly billing. She went to $140,000. She hired some people. The next year, she doubled again to $280,000. The next year she doubled again to $550,000. Incredible increase to the bottom line, even though she was adding people, and it changed her life.

Here’s the lesson, Michelle. It’s not just pricing. She did other things with her strategy and her positioning. She niched down and specialized. She got rid of low-value customers. She finally found her space in the market and focused narrowly because that’s the tail of the dog. The dog is the strategy and the positioning. You can’t let the tail wag the dog. The dog has to wag its tail.

People want to start with pricing because that’s where the low-hanging fruit is. Definitely, there’s low-hanging fruit there, but because pricing touches everything else if you start fiddling with your pricing, I promise you, you’re going to fiddle with your strategy and your positioning because it’s a business model change.

Pricing touches everything else. If you start fiddling with your pricing, you will fiddle with your strategy and positioning because it's a business model change. Share on X

It’s not just the pricing as you said. There are so many elements to it. Ron, I could be here for days because I love talking to you, but niching down, being specialized, getting rid of the lower paying clients and the dead weight as I call it, and being able to stand out. What do you think it was for Jenna that stood out from the other five and made her that Black Swan? What are some of those other things that she implemented that you told her to do that maybe others said, “I’m going to pass. I’m going to try it my own way. I’m going to keep fiddling.”

They all made great progress. She stands out because she doubled for so many years in a row. That always sticks in my mind. They all made tremendous progress. They all fired customers. They all began to choose customers rather than chase customers. They started to get very selective about who they took on as a customer because they realized they only had so much capacity because these were smaller firms.

Even with 2 or 3 employees, you’ve only got so much capacity and you’ve got to protect it for the opportunity that could come along that could be great. If we’re running at 90%, 95%, or 100% capacity, we don’t have time to take care of our existing customers, let alone add new ones to the ship. They all did that, but she was very receptive. She glommed onto these ideas early and she kept doing things.

The biggest thing is she didn’t let the perfect be the enemy of the good. She would launch whatever she was thinking of like this diagnostic test or three options. She realized it was not set in stone, “If it doesn’t work, I can change it. I’ll get market feedback and make adjustments if it’s not working well with my target customers.”

She wasn’t afraid of failure. I gave all these Black Swans permission to fail because I equated it to you learning a new software package. If you changed your word processor and went from Office to Google, there’s probably going to be a dip in your productivity until you get used to the new program and come up on the other side higher than where you were with the old program. That’s going to take some time.

We all have to ride that dip when we’re learning something new, just like we have to fall off the backwards bike. When you watch the backward bike video, you’ll realize training wheels wouldn’t do you any good. You’re going to fall and scrape yourself. It’s going to hurt and you’re going to get back up and you’re going to try it again. You’ve got to be willing to do that. She was one of those risk-takers. She was willing to do that.

That’s with anything. If you change the business model, the value pricing, or change it to subscription, not only do you have to pick one, but you have to be willing to fail. It’s making sure that you’re not afraid of failure and like you did too. You gave them permission. Ron, are you giving everyone permission here to fail if they choose to read your book and make a change? We’re giving you permission.

Absolutely. In fact, there’s so much advice out there now. There are so many people. There are prior Black Swans running programs, teaching value pricing. There’s so much help out there available and so many resources online. I gave you the link to the Journal of Accountancy article that I wrote, which is all about pricing on purpose. It’s exactly what we’re talking about. It goes through each of the eight steps.

In this article, there are eleven exhibits attached to it. Questions to ask the customer during the value conversation, questions to ask yourself before establishing a price, and how to develop options. It goes through every one of the eight steps with additional exhibits that people can use. A sample fixed price agreement and a sample change order are included as well for when scope creep occurs, which is later on in the eight steps. That’s a great resource for people to check out.

Ron, thank you so much for being here with us. I could be here for plenty more hours, but you’ve given so much of your time and have made a contribution to so many firm owners. Everyone here, you have permission to fail and you could be Jenna and follow some of the steps. I want to say thank you again for being here with us.

Thank you, Michelle. Thanks for being the Abundant Accountant. I couldn’t agree with that mindset more.

I appreciate that. That means a lot coming from you, writing eight books. I’m looking forward to having you here again in the future.

I would love to. Thank you very much.

What an amazing episode with Ron Baker. He is a wealth of knowledge. I could sit here for 3 to 4 hours and talk to him, but I know you are all busy and have things to do and things to implement. 1) Go watch the video on the backwards bike. He said if we google it, we’ll find it. 2) Make sure to figure out and listen to all the eight steps on value pricing if that is the direction you would like to take your firm. You have to pick which way you want to take your firm. Listen to his book and buy his book. Go to Amazon. He has a lot of books. 3) If you are a firm owner, accounting, tax, or bookkeeping firm owner and you want to get paid upfront, you want to confidently charge the fees you know you deserve, you’re in luck.

I have a system that works and I can help you create the firm you’ve always wanted. It’s up to you to take that next step. Head on over to the Abundant Call right now to book your free session with me or my team, and we will cover three important areas. Where your firm is at right now, where you want your firm to be to ensure you’re paid first and avoid any pitfalls that might come along, and the exact steps you can take to double your firm revenue.

Every one of our clients and all of our success stories started with this call. It’s your opportunity to turn all of this into more confidence charging premium fees, doubling revenue, and eliminating burnout so you can feel excited about your work again. Head on over to TheAbundantCall.com. We look forward to speaking with you. We’ll see you in the next episode.

 

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About Ron Baker

AA 120 | Value PricingRonald J. Baker started his CPA career in 1984 with KPMG’s Private Business Advisory Services in San Francisco. Today, he is the founder of VeraSage Institute—the leading think tank dedicated to educating professionals internationally—a radio talk-show host on the www.VoiceAmerica.com

Ron has authored seven best-selling books, including: The Firm of the Future; Pricing on Purpose; Measure What Matters to Customers; and Implementing Value Pricing. His latest book, co-authored with Paul Dunn, Time’s Up!: The Subscription Business Model for Professional Firms, was published in November 2022.

Ron has toured the world, spreading his value-pricing message to over 275,000 professionals. He has been named on Accounting Today’s 2001-2007, and 2011-2022 Top 100 and Top 10 Most Influential People in the profession; and inducted into the CPA Practice Advisor Hall of Fame in 2018. He is a faculty member of the Professional Pricing Society. He presently resides in Petaluma, California.

 

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