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Value Billing and Differentiation

Value Billing and Differentiation - BQE Software

In the first part of this value billing series, I mentioned the conventional methods of billing. In this second part, I want to talk about the perceived value of your services and how value billing can help differentiate your offerings--as well as your firm--from the rest.

Perceived Value

Regardless of the fee you charge, clients and prospects decide the value of your professional services based on their experience with your company. It can be through any of the following:

  • Word of mouth
  • Employees answering the phone
  • Projected professionalism and friendliness
  • Enthusiasm for their needs and your own services
  • Proposal quality and completeness
  • Fee and charges
  • Services offered, their quality and timeliness

While you cannot control exactly what clients and prospects think, you can influence how they perceive your company and the value you provide. The key is differentiation.

Death Spiral

Productivity-enhancing technology can help but usually is the last option taken. Cost cutting is done first because it is the easiest. Unfortunately, cost cutting also accelerates the death spiral. For example, you might ―

  • Replace a live person with a “Press 8 to. . .” phone menu, leaving clients and prospects with a less friendly experience and reducing opportunities to communicate a professional, friendly image.
  • Cut corners on services, telling yourself and your staff “It’s good enough” (another death spiral) or “We don’t have time (or margin) for that”.
  • Produce quick and simple proposals, bragging, “I can crank out four proposals an hour just filling in the blanks”. With such a shotgun tactic, you will win some jobs, but professionalism may be short-changed. In addition, prospects will sense little content that says, “This proposal is about what I want and need”.

All of these cost-cutting decisions are common in a commoditization death spiral. It is called a ‘death spiral’ because decisions are based on a survival mentality. To break out of the spiral and thrive, you must differentiate your company in more than one way.


Differentiation has many facets but the result is simple: it is easier to pick your company out of a crowd.

Think about it. Ask yourself how you want to be treated by others. With respect and care? That is exactly how you treat your prospects and clients. Everything you do should induce that feeling. Call clients and prospects by name. Make them feel welcome. Thank clients for a referral and for simply sharing their positive comments.

What's the effect? Positive word of mouth—the most powerful force in the marketplace. It pulls the market toward your company like a magnet. Neutral or no comments make you a non-entity, a company not worth the time to check out. Negative word of mouth repels prospects, keeping you on their radar as an obstacle to avoid (and to warn others to avoid). With positive word of mouth (e.g. client referrals), you can justify a higher fee. It is your advertising. Your company becomes a brand name in a world of confusing, overwhelming choices.

For your company, successful differentiation efforts result in higher perceived value from clients and prospects. As differentiation grows, your fees rise and you gain more of the kind of clients you want. And you earn a good profit and return on your investment in talent and technology. Rather than a spiral fixated on survival, you focus your decisions, investments and efforts on thriving. In short, your value is not only what you believe it is, but also what your clients know it is.

About the Author: Bob Wolff is an accountant-turned-Channel Manager at BQE who helps to offer consulting and software solutions. He likes to share his business expertise here on the blog whenever he can.

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