By Michelle Long and Sandi Leyva
The Ultimate Accounting Virtual Conference
Value pricing is commonly used with consultants in large firms, but how do we apply it to the very small firms?
What is value pricing? It’s a special type of pricing method that is highly misunderstood in this industry. A lot of people, when they go up on their price, they call it value pricing and that’s not correct. Value pricing has nothing to do with cost, it has nothing to do with time or market; it has to do with what the customer vales. That is the only input that goes into value pricing: what the customer values. There is no relation to cost.
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Value pricing is hard because you have to know what the customer values. You have to be really good at putting yourself in the client’s shoes in order to do value pricing. Now let me talk about different pricing methods briefly because I think that will help you a little bit.