Dec 5 '13
Well… the title isn’t going to fill you with excitement and neither is the thought of spending thirty quid on a paperback about pricing… but how wrong you would be to pass this book by. It might just be the one read this year that makes an impact on your firm’s bottom line. I urge you to read it. Now.
To those naysayers who are questioning the relevance of a book on pricing to the professional services… well, ya boo sucks to you. Author Peter Hill is a partner in an accountancy practice, responsible for business development and communicating via a website that, frankly, is a textbook example of how to do it (with the possible exception of social media omission…). So, although this book talks primarily about product pricing, the methods and theories discussed are utterly grounded in empathy with the circumstances we all find ourselves in.
The first thing that strikes you is that, unlike any other accountant I’ve ever spoken to, Hill talks in plain English. Really. His tone of voice is warm and friendly and, before long, you genuinely feel that you’re having a one-to-one mentoring session, rather than reading a book. As one would expect, each chapter ends with handy action points and QR codes, linking to downloads from his website. Key points are hammered home with pull-out boxes, exclaiming ‘ouch’ in the same way that Homer Simpson goes ‘doh’ at the point of realisation that something has gone wrong. And, crucially, the book itself ends with a whole chapter dedicated to ‘42 action points’ you really have zero excuse for not working your way through, right away. This book may be about pricing but it is far from being about navel-gazing and theory. It is utterly and completely grounded in relevant common sense and action.
Hill’s approach to pricing is pretty simple, if you think about it (which he encourages you to). Although he sets out his stall by saying that value-related pricing is the only way to go, he isn’t arrogant and takes time, over several chapters, to explain (and demonstrate) why he’s right. He takes you through the ‘Five ways to grow’ and discusses his opinion that pricing actually plays a bigger part than getting new clients. He clarifies some terminology, as you go along (for example the difference between mark-up and margin) and tackles the thorny issue of ‘putting prices up will lose me clients’.
As one would expect from an accountant, however, Hill encourages us to rely heavily on data and ‘what we know’. That means taking the time to research and analyse competitor pricing and value-provision, as well as using pricing as a way to better understand clients and the quotation process. In this time of alternative fee-structures and ‘productisation’ surely it is more important than ever that we rely not on hunch, history or, even worse (says Hill) a belief in ‘cost + a little bit’.
An area of particular insight was Hill’s handling of discounting and ‘selling’. His use of the ‘Good: Cheap: Quick’ triangle raised some interesting points which bear real relevance to our changing professional services world. But more interesting was his questioning of the impact that discounting might have on your margin and opportunity for growth, as well as your brand overall. He does not hold back his scathing views on ‘loss-leaders’ nor leave the reader in any doubt as to how few organisations actually assess ‘true cost’ as opposed to ‘cost price’, or proactively promote their most profitable offerings.
But underpinning this financial theory is a genuine understanding of the importance of relationships – so key to the professional services. Hill doesn’t just talk about numbers, he also explains what ‘value’ really means, discussing guarantees, communication of price and the approach to discussing price in the pitch process.
I never thought I’d say this but I consider Peter Hill’s book one that every discerning marketing professional (and probably managing partner, too) should read… urgently.
Book review written by Helen Hammond, MD of Elephant Creative, for PM Forum Magazine