July 13, 2019

Lightbulb moment from reader Tony Alves

Sent by Jonathan Stark on July 14th, 2019

Reader Tony Alves sent in this lightbulb moment about value pricing (shared with permission, bold mine, lightly edited for clarity):

Hi Jonathan, I’m a big proponent of not doing hourly billing, and a big fan of your mantra. Today, as I read your email (subject: “What’s hourly billing, and why must it be ended?”), I realized how our son’s orthodontist has mastered value pricing. He even has it down to an art and factors in free checkups with 1 price. It was ingenuous and every time my son would go to see him it felt like the value just got better. For 2 years, he saw my son free once a year. Yes, I am not kidding you. He did multiple checkups on my son free before we even signed for any services. How the heck did he do it for free? Well, who do you think we used when my son finally needed braces? When he saw us, he told us we didn’t need to do a 2-step process that a couple other orthodontists recommended without explanation. He took the time (for free) to explain why my sons case was different than most and did not need the extra cost. Who the heck does that? Well, someone who knows the value of giving value! That’s who. This particular orthodontist has figured out how to stack up years of future work. Give value to your customer up front, lock them in with trust, and show them the value of using them instead of someone who you aren’t sure of. Once we signed 2 years later and it was time, we paid up front 100% of cost because there was a discount if you pay up front (win/win). 2 more years of appointments braces come off, but guess what? More free appointments. At least, they feel like they are free, because my son has a great smile and is done. Now he only goes back if his retainer gets loose. Oh, for free! Actually, you can replace “free” in all my text with “included”, because that is really what it is. If I add up all the time the orthodontist spent on my son, I think he probably made about $700 to $800 per hour on the work he did, but I don’t care. He made us realize the value, before we even started. He works fast, spends less time doing work and more time making my son and us understand what’s going on. My son’s first car was cheaper than his orthodontic work, but it was money well spent. Not once did I ever regret paying up front 100% or the amount paid for the services provided. One last note: The contract had 3 items on it for what would be provided and detailed explanation of what would be given. Now that I look back, it was better than any software services proposal I have wrote. I will start giving more thought to this process in my own services and see if there are some things I could do the orthodontic way. Just wanted to share. Regards, Tony

Great story! Thanks for sharing, Tony :-)