Sep 28, 2020
Tim Williams is a Business Model and Pricing Strategist for professional services firms. He is an industry veteran who is the Founder and Managing Director of Ignition Consulting Group, also a noted author and presenter for major industry associations and business conferences worldwide. As a career marketing professional, Tim’s seminars and keynote presentations have taken him literally around the world, including North and South America, Europe, Asia, India, and Australia.
In this episode, Tim highlights how important it is to devote your time, effort, and energy to the value you can create - a diagnosis of the matter, so to speak, rather than jump right into the solution.
Why you have to check out today’s podcast:
- Find out how to maximize profits through value creation
- Learn how to price based on value by understanding what success looks like
- Discover an effective method of receiving a rate more than what you would quote your client for
“A lot of companies and professional firms have jumped straight to the scope of work without considering what I call the scope of value, without having a clear definition of what success looks like.”
- Tim Williams
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Topics Covered:
00:40 - What led Tim’s path to Pricing
01:54 - The change from hourly to project-based pricing
02:55 - What pricing model do advertising agencies adopt
04:09 - How hourly rate charges for the cost and not the value
04:51 - The Cost-Plus Pricing hardware companies are using
05:48 - How disclosing more cost information veer away from the value creation
06:34 - The difference between a business model and a pricing model
08:06 - How Cost-Plus Pricing and Hourly Rate Pricing doesn’t capture value
09:29 - Thoughts about communicating value
11:45 - Why it is sometimes hard to price based on value
12:18 - Effective method he uses for charging clients’ high rate
13:08 - Receiving from clients beyond the base price you set
14:15 - Companies going for a subscription model pricing
16:16 - How does the subscription model look like in a crisis communication training
17:28 - The challenges and future of subscription model pricing
19:13 - Areas where the subscription model doesn’t apply
22:54 - One piece of pricing advice that can have a big impact on one’s business
Key Takeaways:
“The hourly rate is only a manifestation of your cost structure. It's not a revenue model at all. I think the central problem in professional services is that by using the hourly rate, professional firms are simply charging for their costs, not their value.” - Tim Williams
“Unfortunately, professional firms, agencies, in particular, have ceded way too much power to professional buyers by disclosing more and more cost information. You're having completely the wrong conversation. You're not talking about value created, you're talking about costs incurred.” - Tim Williams
“Devote your time and energy to the scope of value question.” - Tim Williams
“I think letting your client decide what the value is, can also sometimes be effective.” - Tim Williams
“I certainly know there's a school of thought that believes that the entire business world is moving toward a subscription-based model. I think it's a little more challenging in the service world than the product world. But even in professional services, there's a fair amount of intellectual property that resides in professional firms that can be packaged up, named, turned into options, and offered via subscription.” - Tim Williams
People / Resources Mentioned:
Connect with Tim Williams:
Connect with Mark Stiving:
- Email: mark@impactpricing.com