How to Start a Value Pricing Initiative

Source: Accounting Today

Gary Boomer, president of Boomer Consulting in Manhattan, Kansas, writes about why and how to develop a pricing system based on value.

The accounting profession is burdened by commoditization and heavy regulation, which are providing impetus for change. Innovators in the profession are using intellectual capital and new delivery processes to unburden themselves from the yoke of regulation and commoditization. In this new scenario, billable hour pricing creates a diminished client view of value.

Boomer gives this advice to firms that want to help transform themselves and the profession:

• Put someone in charge of value and pricing. This person works with clients to gain an understanding of how clients value firm services. Based on this knowledge, the “chief value officer” helps create value-added services and appropriate pricing strategies.
• Create a task force to assess the firm’s intellectual capital and help train firm members to deliver services based on these resources, and value price them accordingly.
• Write a description of the firm’s ideal client qualities. Try to eliminate clients that don’t fit.
• Become a learning organization where everyone teaches and everyone learns.

The transformation process isn’t a short-term one. You can’t stop what you’ve been doing for years and start over. You must keep current processes going while you gradually inaugurate new ones.

From Accounting Today, October 8, 2007, SourceMedia Inc., One State Street Plaza, 27th Floor, New York, NY 10004, 800-221-1809. For the complete article, click here, then select the article Pricing for Value.