We are still mired in industrial age pricing, although we have moved well beyond this and are most definitely in the service technology age of working. The principles of assigning value apply to the incentive systems we use and the ways we value services.
In many instances, we are still using a time-based system of assessing the price we offer our services at. Yet, the measure of value to the client should not be time, but rather by the enhancement and value provided to them to benefit, assist or enable them. Nor should we quantify it by the number of people served. Why are we still charging based upon hours or units? Where is the actual value?
This notion applies to products and is also very relevant when talking about the value of services. If we compare the price of a commodity, it is simple. However, when the service relies on relative experience and expertise, the value is vastly different, spending on the extent of knowledge and skill. Here the buyer will favor a time-based value system and focus on how long the process takes versus the relative experience.
The end product will be vastly different based upon the producer’s skills, knowledge, experience, and creativity.
- You want a painting of an elephant, and yes, you will get one.
- Yet, no two portraits of an elephant will be the same, and time or units will not reflect the value of the piece of art.
- A few things will be evident for any service you are purchasing:
Whether you are the buyer or the seller, the question we should be asking ourselves is not the units of time or number of items required, but instead the value attributable to the service?
