It’s About the Value, Not the Price

I’ve talked to a number of professional services marketers who have moaned about the obsession of some firms to promote themselves based on price.   From accounting firms to law firms – focusing on differentiating yourself in a crowded market by price is just not the way to go.  

“Price is what you pay. Value is what you get.”
Warren Buffett

I’ve seen firms in the Midwest market specifically that charge less per hour than the “firms on the coast.”  Here’s the rub – if you don’t provide specialized, timely and high-level service, they won’t care about your hourly rates. They’ll find someone else who can meet their needs, and the price will not be a concern.   Your clients want you to add value to their dollars.   

A friend of mine told me about a focus group he held for a professional service firm with several CEO clients. During the session, one of them made it really clear that if the firm he works with “doesn’t know what keeps me up at night and understands my industry,  then I’m not going to hire them. Period.” Another said, “They (the firm) can charge me $5 or $500 an hour, but if they can’t protect my company and me from threats on the horizon, they’re gone.”

In my case, my law firm focuses on customer service first and markets our services that way.  Yes, it’s as simple sometimes as providing value. Our clients want to be able to reach us and get answers to their questions on their time schedule. They want us to protect their interests and solve their problems. And we deliver that.  Sometimes it’s ill-timed, and sometimes, the questions and expectations are maddening. But, if you can’t be there for a client when they need you, they will find someone more available.  And if they leave, money will not be the reason.  

Starbucks charges up to $13 dollars for some of its high-end drinks. You used to get a large coffee at 7-11 for $1. They doubled it this year to $2. So, in the conversation about who has the best coffee, why doesn’t anyone ever mention 7-11? Consumers see Starbucks as an experience and a company that sells higher-end coffee. Whether they are or not, that’s the perception Starbucks gives and if you’ve followed their pricing strategy in the last few years, you know they really don’t care how much they charge, nor do they explain the reason for their increases.  

Don’t fall into the trap of cheapening your expertise or services by focusing on your hourly rate. If you’re giving your customers or clients what they need, bill them accordingly. And if they won’t hire you because they think your rates are too high?  Send them to Legal Zoom, the attorney equivalent of a 7-11.  You’re worth more than that; price should not be the focus if you’re providing the service your client needs and showing them value.  So stop debating it. 

I’ll leave you with an old story that took place one day at a shipyard.  For whatever reason, a big ship’s engines were not working, and the owners called in all sorts of consultants and “experts,” and no one could get them to run correctly.  They were desperate and open to any ideas at that point. So one of the shipyard employees recalled that an old-timer used to work on the docks for decades and could fix anything.  So the employee tracked the guy down and brought him in, and the old-timer intently looked at the engine. After about 10 minutes, he took out his hammer, tapped one of the mechanisms and the engines roared back into life.  The shipowners were elated.   A couple of days later, the old-timer sent them a bill for $10,000. They balked and asked for justification for this. He then sent them a revised bill that said, “labor to tap hammer, $2.  Knowing where to tap, $9,998.” 

The point is that the shipowners were paying for a lifetime of experience in that one moment.  And if you possess that kind of expertise, you should never sell yourself short.