Passing the Torch of Value Pricing

February 8, 2010

A few years ago, I realized that billing by the hour for software projects was a fundamentally flawed pricing model. I began looking for an alternative and found one in the excellent book Value Based Fees by Alan Weiss. I have been very happy with the results and have spent a fair amount of effort sharing my experience with folks who are looking for an alternative to hourly billing.

Kirk Bowman recently turned me on to Ed Kless, senior fellow at the VeraSage Institute. Ed is an outspoken critic of the hourly billing model, and an articulate advocate of value pricing (which - by the way - I've been referring to on this blog and elsewhere incorrectly as "value billing").

If you want to learn more about value pricing and how it differs from hourly billing, I highly recommend visiting the VeraSage site, and reading Pricing On Purpose by VeraSage founder Ron Baker.

And with that, I'm going to conclude my weekly series on value pricing. VeraSage is better at it, and I'd rather blog about programming :) If you'd like to speak with me about how to convert your business from hourly billing to value pricing, I offer a number of services that might be of interest.

Thanks for reading!