Why Your Clients Want You to Change Your Pricing
Clients don’t necessarily want to pay agencies more – they want to pay differently. Time-based billing creates misaligned incentives and reactive relationships, while value-based pricing builds trust, alignment, and better results. When agencies price outcomes instead of hours, both sides win: clients gain stronger partnerships, and firms finally capture the true value they create …
For the Agency Business to Live, the Billable Hour Must Die
The agency business isn’t dying from lack of innovation – it’s suffocating under the weight of the billable hour. Professional firms can’t compete for top talent or scale their profits when their revenue is tied to time instead of value. To survive, agencies must abandon the hourly rate and reimagine their work as scalable products and programs – decoupling growth from headcount and creating true exponential potential …
Inside-Out and Bottom-Up: No Way to Design a Revenue Model
Many of the challenges faced by professional service firms today can be linked directly to having an upside-down, inside-out revenue model. Suboptimal margins make it chronically challenging to attract, pay and retain the best talent, creating a vicious cycle …
Pricing an Assignment? Begin With the End in Mind
The fees you charge your clients should not be set based on the scope of work, but rather the scope of value. In professional services, you’re not selling your ability to do, but rather your ability to solve — your head, not your hands …
To Boost Your Profits, Diversify Your Remuneration Portfolio
When creating an investment portfolio for retirement, no reasonable person would put all their money just in just one type of investment. In a professional services firm, if your client compensation agreements are all based on the same remuneration system — just fees based on hours, for example — it means you’re not diversifying your portfolio, and by definition not maximizing your firm's profitability …