Old habits die-hard… and it’s difficult to reshape the expectations of others that are accustomed to a certain modus operandi. So how does one kill hourly billing? Why does one kill hourly billing? I don’t know how others have done it and I don’t know why others have done it… but here’s my story (and I’m sticking to it).
Guess I’ll start at the beginning – when I jumped off the cliff (not literally but figuratively). It started with a good ole Google search for “fixed pricing agreement”, “fixed pricing model”, “fixed pricing”…. you get the picture. And like Alice in Wonderland, down the rabbit hole, I went… that was about six months, several blogs and several books ago.
So I guess I’ll get back to answering those questions… Why and How does one kill hourly billing? First Start with Why.
Why did I want to kill hourly billing for me and my team in the first place? Because the more I thought about it, the more it made me uncomfortable. The more I felt that it, hourly billing, was contrary to everything I wanted to be for my customers. I wanted to encourage a team environment, I wanted to create a partnership with my customers, I wanted my team to be cheerleading section for our customers as they travel the path onto growth and greatness.
Consider this, hourly billing puts the consultant and the customer on opposite ends of the spectrum… on opposite teams… creating an “us” versus “them” environment where the consultant wants to maximize their income (increase billing) while the customer wants to get the most work done for the least amount of moolah (less billing more quality). So do you see why I had to kill hourly billing???
Then came the HOW to kill hourly billing? This was a little harder than I thought it would be.
- Step 1: Deciding that enough is enough. I was tired of fighting with my customers (figuratively & literally).
- Step 2: Get help, a lot of help…from a lot of friends that think the way that I do and a lot (I mean A LOT) of trial and error.
- Step 3: Constantly going back to WHY hourly billing had to die!
- Step 4: Be patient with myself, my team and my customers new & old… because it will take a little while for everyone to get “it” and get on the same page.
- Step 5: Reread all the steps!
Are we holding hands around a campfire, telling stories and singing Kumbuyah? No… not yet but the beauty of it all is that we are getting there.
Do you have a trashing time sheets story? Let me hear about it in the comments… or give me a shout on twitter. Loved to hear how value pricing is taking over your corner of the world!
Implementing Value Pricing – Ron Baker
Great post Joyce, glad you are on the path to stop billing by the hour and spreading the word! Valuing pricing is tough, but soooo worth it!
hey Kevin, thanks for the compliment and the comment. How is your value pricing going?
I’m still in a firm that bills by the hour, so not as quick as I want, but I am going the “ask for forgiveness, not permission” route with all new clients, it is too important to client relationships not to do it this way.
not as quick as you would like? Is anything as quick as we would like it to be??
Keep pressing forward. Keep asking for “forgiveness”. Hopefully, they will come around to your way of thinking… eventually.
Been on the right track since 1994. Never going back! Join VeraSage Institute and join like minded individuals and companies. Founded by Ron Baker, Dan Morris and myself. We’ve been changing minds, and firm cultures to the type you are becoming ever since. Check it out!
I have read a few things from Ron Baker. Stumbled upon him and VeraSage Institute when I was struggling to find a solution to the tug-of-war with my client base. I will definitely check it out (again).
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