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June 2009 |  BY RONALD J. BAKER |  Article

A business is defined by the value it creates for its customers. Your price speaks volumes about your value proposition, more so than any other component of your firm’s marketing. The business world pricing revolution began in the 1980s, when many of the Fortune 500 companies began to employ professional pricers, and organizations such as the Professional Pricing Society were founded to assist companies in achieving excellence in pricing for value.

June 2009 |  BY RONALD J. BAKER |  Article

Editor's note This is a sidebar to Pricing on Purpose How to Implement Value Pricing in Your Firm. People tend to buy emotionally and justify intellectually, which makes the study of price psychology a worthwhile endeavor. Essentially, price psychology has two characteristics 1. Price leverage 2.

June 2009 |  BY Ronald J. Baker |  Article

Editor's note This is a Webexclusive sidebar for Pricing on Purpose How to Implement Value Pricing in Your Firm. The following questions should be answered by the pricing councilCVO after each major engagement Did we add value for this client? How could we have added more value? Did we capture value? Could we have captured more value through a higher price? If we were doing this type of FPA again, how would we do it? What are the implications for productservice design? Should we communicate the lessons on this FPA to our colleagues and how? How could we have enhanced our client’s perception of value? What did we teach this client? What other needs does this client have, and are we addressing them? Did this FPA enhance our relationship with this client? What impact has this FPA had on developing our client’s trust in us? How would you rate our client’s price sensitivity before and after this job? How has this FPA advanced us? Did we have the right team on this FPA? How high were the costs to serve? What could we do better next time? Do we need to update our client complaint register? How could we thank this client for their business?

June 2009 |  BY RONALD J. BAKER |  Article

Editor's note This is a Webexclusive sidebar for Pricing on Purpose How to Implement Value Pricing in Your Firm. Client Date Project description and scope of services and estimated completion date, if appropriate Price $ We believe it is our responsibility to exceed your expectations.

June 2009 |  BY RONALD J. BAKER |  Article

Editor's note This is a Webexclusive exhibit for Pricing on Purpose How to Implement Value Pricing in Your Firm. Examples of purpose and strategy statements for the role of the pricing council and chief value officer (CVO) are To ensure the firm prices on purpose, according to the value received by the client, not the costs incurred in performing the work.

June 2009 |  BY RONALD J. BAKER |  Article

Editor's note This is a Webexclusive exhibit for Pricing on Purpose How to Implement Value Pricing in Your Firm. November 19, 2009 Dear Client In order to document the understanding between us as to the scope of the work that ABC, CPAs will perform, we are entering into this Fixed Price Agreement with XYZ, Inc.

June 2009 |  BY Ronald J. Baker |  Article

Editor's note This is a Webexclusive sidebar for Pricing on Purpose How to Implement Value Pricing in Your Firm. The history of business is the history of epiphanies. Sometimes the fog clears up, and the right path is seen. This certainly happened—with respect to pricing—for Ben Cohen and Jerry Greenfield, founders of Ben & Jerry’s ice cream.

June 2009 |  BY RONALD J. BAKER |  Article

Editor's note This is a Webexclusive exhibit for Pricing on Purpose How to Implement Value Pricing in Your Firm. Hourly billing misaligns the interests of the CPA and the client—the client wants work done effectively, whereas the CPA firm wants to log more hours. It does not focus on what clients buy.

June 2009 |  BY RONALD J. BAKER |  Article

Editor's note This is a Webexclusive exhibit for Pricing on Purpose How to Implement Value Prici

June 2009 |  BY Ronald J. Baker |  Article

Editor's note This is a Webexclusive sidebar for Pricing on Purpose How to Implement Value Pricing in Your Firm. Also see Exhibit 7, a sample fixedprice agreement. Date of the FPAThe fixedprice agreement (FPA) shown in Exhibit 7 can be either for a calendar or fiscal year, depending on the client.