In a break from my admonishment that you might be too expensive, let’s explore the idea that your firm has a certain pricing culture that might be in the way of you charging more. 

I’m fond of saying that pricing is a prison cell in your mind, of your own making. You see yourself trapped within a narrow band of what you can charge. Your competitors are similarly trapped, but the band or cell they are trapped in is different from yours. Some of your competitors are charging significantly more than you, and some significantly less, yet everyone feels restricted, confined by the idea of an elastic demand that will drop with the slightest price increase. 

Even if you bust out of your own prison (i.e., come to understand that you can raise prices if you change the way you price) your team is still back in the joint. That’s because there is a culture of value, money and pricing in your firm that is not easily changed by your epiphany. Culture is a shared collection of behaviors, underpinned by a collective understanding. Seth Godin pithily summarizes it with the line “people like us do things like this.”

As an example, your people might proudly say, “In our firm, we …”

  • “Provide good value for money”
  • “Treat everyone fairly”
  • “Value customer service”
  • “Work transparently with our clients”

Each of those statements is admirable on the surface, but consider the possible pricing implications of each. This is what I hear:

  • Value for money = Inexpensive
  • Treat everyone fairly = Price the service, not the client
  • Customer service = We get paid for doing, not for thinking or value creation
  • Work transparently = We make our costs visible to the client

Your own pricing epiphany is likely rooted in the realization that you’ve long created far too much value for the prices you’ve charged, and that you deserve a larger share of that value. You are the crab bent on escaping the bucket, and your culture—the shared understanding and behaviors of your people—is the mass of other crabs pulling you back in, saving you from the horrible mistake you are about to make. 

Your culture says that higher prices aren’t good value, that charging different prices to different clients based on the differences in value creation isn’t fair or equitable, that your transparent prices need to communicate to your clients how cost efficient you are.

I’ve been in these cultures and believed all these things. I’ve been one of the other crabs rationalizing why the price should be lower not higher. No one escapes on their own. Everyone needs to go over the wall together. 

A Series of Pricing Prompts

Here are some prompts that you might use (on your own or with your leadership or broader team) as a means of exploring ways of changing the pricing culture in your firm. Some of the prompts are about actual changes you might make to the service offering or underlying business, and some are narrower pricing prompts. 

Can You Move Upmarket?

Generally speaking, the higher end of the market you serve, the more money there is. 

  • Why are you serving the market you are serving and not higher up? 
  • What would it mean to be a “luxury brand” in your space?
  • What might a “concierge” or “white glove” service look like?

Can You Combine Disciplines?

There are often riches in combining two or more disciplines. When I was a kid the job of underwater welder was famous for paying the highest hourly wage in the world. Think beyond the obvious combinations of disciplines (e.g., design and development). 

  • What unrelated disciplines might you mix to solve your clients’ more expensive problems? 

Can You Shift Culture With New Hires?

Perhaps you need to hire people who have priced or sold more expensive things than what you’re selling, someone coming from a larger prison cell or someone who has broken out altogether.

  • What place might you hire from that is like the market you serve, but far more expensive, more luxury? 

Do You Need a New Anchor?

If you have a standard or typical offering that serves as your anchor option in your proposals, consider replacing it with something far more expensive, which then allows you to raise the prices of your other offerings. (If that sentence doesn’t make sense to you then grab a copy of my book Pricing Creativity: A Guide to Profit Beyond the Billable Hour.)

  • What is the most you could do to deliver the highest level of certainty that your clients will create the value they seek? What audacious price could you put on this?

Are You Too Focused on Efficiency?

I know multiple firms where the owner had a pricing epiphany but the firm’s culture of efficiency—which they so assiduously built through intricate systems over many years—was like gravity pulling their prices back down to earth. Pricing the client, charging for thinking instead of in units of doing, value- or outcomes-based pricing—all these more progressive pricing techniques are directly at odds with measurements of billable efficiency and effective hourly rates. (Explained in more detail in The Innoficiency Problem.)

  • What experiment might you do with one client or one small team to free them from the requirements to be efficient?
  • What value creation and capture metrics might you measure instead?

Are the Right People in Charge of Pricing?

The fastest way to create a more premium pricing culture is to simply move pricing authority to the best pricers. Maybe it’s you. Maybe it’s a more junior team member. 

The common mistake is to assign pricing responsibility based on roles (e.g., “You’re a project manager therefore you set price,” or “I’m the owner therefore I should set price”), seniority (e.g., “You’re the most senior person on the account team therefore you set price”), or tenure (e.g., “I have the most experience therefore I should set price”).

The best pricer(s) should set price. Period. Who are they?

  • Who on the team routinely commands the highest prices?
  • Who on the team most highly values what we do?
  • Who on the team doesn’t need to like or be liked by the client?

Summing Up

This pricing prison cell is shared by all on the team—behaviorally if not intellectually. Your own pricing epiphany is just the start. If you don’t work to take others along with you, your own culture—something you might be immensely proud of—will hold you back. Consider the above prompts to try to shift that culture and break out together.