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Value Is Subjective, Pricing Is Contextual with Ron Baker – 013
Ron Baker is the author of six books, including Implementing Value Pricing. He’s the founder of the VeraSage Institute and a Graduate of Disney Institute. He’s on the faculty of the Professional Pricing Society and a host on a talk radio show, The Soul of Enterprise. He’s a LinkedIn Influencer blogger and a recovering CPA.
All Value Is Subjective
* What is the most important thing you can share about pricing?
* Prices are ultimately set by value, not by the competition or supply/demand, but by value.
* Value is subjective. It is a feeling, not a number.
* The technical definition of value is the maximum price a consumer will pay for an item.
* If you willingly pay a certain amount for something, it is worth more than that to you.
* The customer has to make a profit too.
* The value graph:
* Customers don’t care about the cost to the business.
* The price set has to be above the cost or the business makes no profit.
* The value has to exceed the price or the customer makes no profit.
* Both the seller and the buy want to maximize value and that’s the one area where our interests are aligned.
* Inputs are irrelevant; the results are what matter.
* What was your first exposure to value pricing?
* He left his Big 8 firm and started his own firm with Justin Barnett.
* He learned quickly that his customers were not buying his time.
* Ron switched to value pricing to enhance the customer experience.
* The billable hour is a lousy customer experience.
* Offer the customer a money-back guarantee to assure the customer you aren’t gouging them.
* If any customer complains loudly enough, you are going to write it off anyway.
* Of your six books, which is your favorite?
* Ed Kless says Professional’s Guide to Value Pricing compared to Ron’s most recent book is the Old Testament vs. the New Testament.
* Firm of the Future with Paul Dunn has stood the test of time.
* Measure What Matters to Customers was one of the books that Ron has the most fun writing.
Learning to Discover Value
* How long should the consultant talk during a value conversation?
* The customer should talk 80% of the time; consultant only 20%.
* Usually, the professional ends up talking 60-70% of the time.
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By Kirk Bowman
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Ron Baker is the author of six books, including Implementing Value Pricing. He’s the founder of the VeraSage Institute and a Graduate of Disney Institute. He’s on the faculty of the Professional Pricing Society and a host on a talk radio show, The Soul of Enterprise. He’s a LinkedIn Influencer blogger and a recovering CPA.
All Value Is Subjective
* What is the most important thing you can share about pricing?
* Prices are ultimately set by value, not by the competition or supply/demand, but by value.
* Value is subjective. It is a feeling, not a number.
* The technical definition of value is the maximum price a consumer will pay for an item.
* If you willingly pay a certain amount for something, it is worth more than that to you.
* The customer has to make a profit too.
* The value graph:
* Customers don’t care about the cost to the business.
* The price set has to be above the cost or the business makes no profit.
* The value has to exceed the price or the customer makes no profit.
* Both the seller and the buy want to maximize value and that’s the one area where our interests are aligned.
* Inputs are irrelevant; the results are what matter.
* What was your first exposure to value pricing?
* He left his Big 8 firm and started his own firm with Justin Barnett.
* He learned quickly that his customers were not buying his time.
* Ron switched to value pricing to enhance the customer experience.
* The billable hour is a lousy customer experience.
* Offer the customer a money-back guarantee to assure the customer you aren’t gouging them.
* If any customer complains loudly enough, you are going to write it off anyway.
* Of your six books, which is your favorite?
* Ed Kless says Professional’s Guide to Value Pricing compared to Ron’s most recent book is the Old Testament vs. the New Testament.
* Firm of the Future with Paul Dunn has stood the test of time.
* Measure What Matters to Customers was one of the books that Ron has the most fun writing.
Learning to Discover Value
* How long should the consultant talk during a value conversation?
* The customer should talk 80% of the time; consultant only 20%.
* Usually, the professional ends up talking 60-70% of the time.