March 21, 2019

Anthony English on the profound difference between billing and pricing

Sent by Jonathan Stark on March 22nd, 2019

Long-time reader and friend of the list Anthony English recently kicked off a new IT project with an old client and noticed something profound about the “before and after” of billing vs pricing (shared with permission):

Hi JS, I’ve just started a small IT project for a client who I previously worked with several years ago. This time, the project is fixed price (not exactly value priced), and was fully paid up front. What struck me on the first day of the project was how much extra time I spent on talking about planning and business outcomes, and how much my approach changed to getting the technical things done quickly (but well!) I also was keenly aware of how much I was focusing on the client’s perceptions of risk, and how little I cared about the time it was going to take. (In a past life, where I was paid by the hour, if the client proposed something that would, in fact, take me longer, I got a sugar hit. This time the prospect of extra time felt a little like working unpaid, so I was super focused on the planning phase and the business outcome!) One other side effect of focusing on the business outcome, rather than the time I was spending there, was that it made me raise the discussion of other outcomes in other parts of the business that are unrelated to this project. It’s very liberating! Anthony

Thanks for sharing, AE!

Anthony’s experience mirrors my own. Switching from billing to pricing had a profound and beneficial effect on the way I approached working with clients.

You start to become truly efficient, probably for the first time ever. Your entire being becomes laser-focused on delivering results as quickly as possible.

This is good for your client because they can enjoy the benefits of your engagement sooner, and it is good for you because the quicker you deliver the desired outcome, the more you make.

Win win!

Yours,

—J