Advisory Work Must Be Priced by Value, Not Hours
Technology pushes us to handle more advisory work, which allows more value pricing.
By Jody Padar
The Radical CPA
As a professional in the industry, you may find some of what you do easy. Just because you find it easy doesn’t mean it isn’t valuable and worth more than the time you put into it. If it were truly easy, your clients would be doing it themselves rather than paying you.
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Undervaluing ourselves and what we bring to the table is a chronic problem plaguing accountants and CPAs. Why do I say this? Because people pay more for the luxuries they value. Let’s look at a comparison:
Today, the MSRP of a Cadillac Escalade is over $81,000 while the MSRP of a Chevy Suburban is slightly under $60,000. If these automobiles were priced according to the time it takes to make them, plus the cost of their parts, the difference between their retail prices would probably be far less. To maximize profits, GM spends a lot of time and money researching how much their customers value their different products. Certainly, the brand makes a difference, but the Cadillac also offers a more luxurious package. It doesn’t cost GM a lot more money to offer these luxuries, but their customers place a much higher value on them, and GM understands that value.
Pricing according to value really isn’t a radical concept!
