Ron Baker Special: Value Pricing 2.0 for Accounting Firms - Accounting Voices Podcast

Episode 58

Ron Baker Special: Value Pricing 2.0 for Accounting Firms

Published on: 10th July, 2019

Ron Baker

Ronald J. Baker started his CPA career in 1984 with KPMG’s Private Business Advisory Services in San Francisco. Today, he is the founder of VeraSage Institute, the leading think tank dedicated to educating professionals internationally. His radio show with Ed Kless goes out weekly is on the www.VoiceAmerica.com show: The Soul of Enterprise: Business in the Knowledge Economy. He is also the Chief Value Officer at Armanino LLP, the 23rd largest firm in the USA.

Ron has been an instructor with the California CPA Education Foundation since 1995 and has authored twenty courses, and seven best-selling books, including: The Firm of the Future; Pricing on Purpose; Measure What Matters to Customers; Mind Over Matter; Implementing Value Pricing; and The Soul of Enterprise: Dialogues on Business in the Knowledge Economy, co-authored with Ed Kless. Shownotes:

  • Customers don’t care about the time you spend doing things, what they are about are the outcomes
  • Accountancy is not alone in struggling with the billable hour – any industry that sells time has challenges with pricing
  • The billable hour only looks at inputs, not outcomes, and takes no account of value
  • Value was first defined by economists and is the maximum amount a customer is willing to pay for an item
  • Value is not a number, it’s a feeling – accountants have a problem with non-quantifiable things
  • When it comes to value pricing, accountants have to be comfortable with ambiguity and psychology
  • Accountancy has a relevancy problem – it’s a deteriorating paradigm that becomes increasingly complex but explains less and less
  • If accountants think stock market investors are using their financial statements to make decisions, they are insane – it’s all too old and historical
  • The accountancy profession is stuck in a 100 year old business model of ‘we sell time’
  • With Value Pricing 1.0, pricing and packaging was customised for each client
  • The subscription business model is a massive macro economic trend which has a place in the accounting profession
  • Value Pricing 2.0 is more focused on not pricing a product or service, but rather the client relationship, transformation and peace of mind
  • Throughout commercial history, anytime a business model changes, the pricing strategies change and also the metrics or KPI dashboards
  • The growth of ‘concierge medicine’ in the US is basically selling insurance and peace of mind
  • How Porsche are using value pricing 2.0 with subscription models to their vehicles
  • Any profession or business can be turned into subscription model like Spotify, Amazon, Netflix or accountancy
  • Subscription models for accounting firms create predictable revenue and greater customer loyalty
  • We all buy insurance – it’s a 3.3tn industry, so why not buy accounting services in the same way to get peace of mind?
  • Amazon Prime members spend 7x more than non-Prime members – it was never about free-shipping but ‘buy everything here’
  • New accounting firms have no tolerance for the billable hour – 10 of the top US 100 accounting firms are using value pricing
  • Lawyers started timesheets and billable hours in 1919, and there has been little change in 100 years
  • How ideas, intellectual capital and knowledge separates the good firms from the great ones, so dynamic learning, innovating firms make great firms
  • Think what Amazon (and Facebook) know about you – knowledge of your clients gives accountants a competitive advantage
  • The best accountants or CPAs are always investing in their human capital – curious and constantly learning
  • Why accountants should find a new specialty every 5 years
  • Do you want to be led by someone who doesn’t read 50 books a year, because where are they getting their ideas from?
  • Why ‘The End of Accounting’ by Baruch Lev and Feng Gu is a ‘nuclear bomb and should be debated by the whole accountancy profession
  • How Ron Baker went from pro-choice to pro-life on the abortion issue
  • We learn more from people we disagree with and those voices of dissent who challenge your ideas
  • The conception of the Verasage Think Tank – an alliance or mastermind of thought leaders in professional services
  • How accountants can get started with a different pricing approach and a better client relationship
  • Not selling services, but creating annuities with a lifetime value that far exceeds whatever you paid to acquire them
  • Collective knowledge of your customers, which is a competitive advantage that cannot be duplicated

'If accountants think stock market investors are using their financial statements to make decisions, they are insane' says value pricing expert @ronaldbaker of @@verasage on the #Accounting Influencers Podcast #accountex #advisory…

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Ron has toured the world, spreading his value-pricing message to over 210,000 professionals. He has been named on Accounting Today’s 2001-2007, and 2011-2018 Top 100 Most Influential People in the profession; voted among the Top Ten Most Influential People in the profession in 2012-2018; selected as a LinkedIn Influencer Blogger; and inducted into the CPA Practice Advisor Hall of Fame in 2018. He graduated in 1984 from San Francisco State University, Disney University in 1997, and a faculty member of the Professional Pricing Society. He presently resides in Petaluma, California. Contact Ron directly:

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About the Podcast

Accounting Voices Podcast
Accounting Voices helps people in the accounting world stay relevant visible and vocal. Host Rob Brown interprets trends reshaping the profession and gives listeners insight to build authority influence and a stronger voice in firms and markets.
Accounting Voices, hosted by Rob Brown, helps decision makers and leaders in accounting and finance stay relevant, visible and vocal in a profession being reshaped by technology, private equity, regulation and shifting client expectations. Each episode interprets the trends disrupting accounting and finance such as AI, automation, M&A, talent and the move to advisory and translates them into practical insight that strengthens authority and influence.
Accounting Voices is also a platform for the wider ecosystem of networks, associations, educators, consultants, software vendors and technology experts who serve accountants and finance professionals worldwide. It extends into regular Accounting Voices networking sessions that connect this audience and amplify ideas that move the profession forward. With its international reach and long shelf life the show delivers credibility and commercial value for listeners and sponsors alike. Search for "Accounting Voices" on YouTube for all episodes and connect with Rob Brown on LinkedIn to find out more: https://www.linkedin.com/in/therobbrown

About your host

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Rob Brown

ob Brown is the creator and host of the Accounting Voices Network, a media platform that includes the flagship solo podcast Accounting Voices and the panel shows Accounting M&A and Accounting Tech. He chairs conferences, panels and virtual events worldwide and is recognised as a leading advocate for the accounting profession.

He is an accomplished speaker and authority on trust, reputation, employer brand, talent, succession, executive presence and the forces shaping the future of accounting. Rob is the author of the bestselling book Build Your Reputation (Wiley) and his TEDx talk The Personal Brand of You has been viewed more than 400,000 times.

A former co-founder of the Accounting Influencers Roundtable, Rob now focuses on amplifying the voices of leaders, firms, networks, vendors and influencers across the global accounting ecosystem.

Outside of work he is a stroke survivor, lives with epilepsy, holds a black belt in kickboxing and is based in Nottingham, UK. He plays chess and backgammon, loves orange chocolate and is allergic to grapefruit.