Value pricing isn’t the answer for every agency

Despite all of the gurus who tout the idea of “value pricing” to agency owners, it may not be the best approach for everyone.

In fact, it is a concept that is often misunderstood and rarely implemented properly.

Chip and Gini talk about what value pricing — and what it isn’t — as well as how and when it may be useful. They also explore some of the pitfalls, misconceptions, and downright bad advice that agencies get.

Transcript

The following is a computer-generated transcript. Please listen to the audio to confirm accuracy.

Chip Griffin 

Hello, and welcome to another episode of the Agency Leadership Podcast. I’m Chip Griffin,

Gini Dietrich 

and I’m Gini Dietrich,

Chip Griffin 

and you again had that lovely delay as if you didn’t know what your name was or you didn’t.

Gini Dietrich 

I got through it this week. I got I made it this week.

Chip Griffin 

Well, I guess that’s a good thing. But you know, we do have this same setup every single week. So I say, I’m Chip Griffin, and then you say, I’m Gini. Dietrich, there’s, there’s no need for a pause, you should be you should be prepared for it. Now, okay. Or at least more prepared than we are for the topic of today’s show, which we came up with 30 seconds before I hit the record button. But I think it’s gonna be a good one to do.

Gini Dietrich 

It was two minutes. Well, that’s not entirely true. Because you did put together a list of topics like three weeks ago, and we’re just going through the list right now. So

Chip Griffin 

it’s, but this was one that was decided, we just we just

know what it was.

Gini Dietrich 

I just didn’t Yes, it was. I just didn’t say it out loud.

Chip Griffin 

Oh, okay. All right. Yes, I’m glad you remember what’s on the list. I thought it was an original idea I had this morning. Just that that goes to show where my head’s at. All right. So let’s let’s get into the show. Because all right, I really want to rant about this one. Because I’m really annoyed. I know, I am annoyed, because I spend a lot of time reading and listening to the advice that agencies are given. And a lot of that surrounds pricing. And my pet peeve these days, in particular, is this notion of value pricing. And the reason why it drives me just bonkers is because most people first of all, don’t know what they’re talking about when they say value pricing. And secondly, it’s very difficult for most agencies to properly implement value pricing, even if they wanted to. So I want to talk about this because I think that a lot of folks are getting some some really bad advice out there. And or they are misconstruing the advice that they are being given.

Gini Dietrich 

Okay, so let’s back up and talk about what value pricing is, and how that compares to fixed pricing.

Chip Griffin 

Yes, that’s, that’s one of the that’s one of the biggest misconceptions. So that’s. So value pricing, when implemented properly means that you price the work that you’re doing for a clie...