In this episode of the “Art of Value” we create an “un-episode”. We got off the record and unscripted to talk about Home Depot’s return policy to TurboTax to a plethora of other topics.
Please find a full audio transcript below:
Announcer: This is the Art of Value Podcast. Discover value, create options, and start pricing. ArtofValue.com.
Kirk: It really never occurred to me that you could ease into value pricing through a process. For me, I’d always thought, “You know what? You just got to bite the bullet, you got to make the commitment, you got to jump off the cliff.”
Welcome to the Art of Value show. My name is Kirk Bowman, a visionary of value. This is the show where we discover value, create options, and start pricing. On today’s show, I’m going to try something new. Susan Fennema and I recorded an unscripted episode. We set down, five minutes before we pressed record, and listed out seven topics that we want to discuss. We didn’t discuss our views on these in depth, we shared them live as we recorded the episode. There are two reasons we’re trying this format. First, you said you wanted to hear more of my opinion on the topics of value and pricing. Second, the episodes that Susan and I have done together have been some of the most popular with you, our audience. I’m calling this format the un-episode. If we get positive feedback from this episode, we’ll try to do it on a regular basis. Now, if you like it, be sure to go to the show notes page for this episode at ArtofValue.com/86 and leave us a comment, or join our private Facebook group at ArtofValue.com/society and leave feedback in our private Facebook community.
During this episode, we’re going to talk about at least six topics such as what are our reactions to the previous episode with Andrew Robinson. Two, what does Susan think about using TurboTax? Three, what’s my opinion about value pricing or counseling? Four, we discuss an article about a 90 day return policy at Home Depot. Five, we talk about how you can adapt your processes to a commercial product like SAS. Six, how do you say no during the project life cycle? Again, this is unscripted and mostly unfiltered. Let us know if you enjoy this format. Also, if you’d like to get even greater access to me and Susan, consider joining the Art of Value Mastermind. This is a group that I meet with weekly online and it’s your opportunity to ask me questions during that weekly call. Also, you’ll have access to a private forum that both Susan and I will monitor and answer your questions. Occasionally, we’ll share some gifts and surprises with you as well. If you’d like to get more information about the Art of Value Mastermind, simply go to ArtofValue.com/mastermind. Now, let’s go to the un-episode with Susan.
Announcer: Discover value, create options, and start pricing. ArtofValue.com.
Kirk: Welcome back to the Art of Value show. The dean of success for art of values, Susan Fennema. Hey, Susan.
Susan: Hello. Good to be here.
Kirk: Today, we’re going to try something different. We’re going to do what I’m calling an un-episode. Normally, I have a guest, I have a preset list of questions, and we’re focused on a specific theme or topic. Today, Susan and I are just going to get together and talk about the things that are on our mind. Literally five minutes before we hit record, we listed out a few agenda items, but we’re literally going to wood shed these live. It’s an opportunity for us to make comments about things that are currently in our mind, but also for you to get to experience what we do on a daily basis as we woodshed things within our business. Susan, you ready?
Susan: Sure, let’s go.
Kirk: All right. The first thing on the list is just some reactions or thoughts to the last episode. This is the episode number 85 with Andrew Robinson. It’s titled Learn Value Pricing Through a Process. It’s interesting, in that episode, Andrew was talking about how, for accountants, they have trouble learning value pricing because there’s so much about it’s either right or wrong. It’s either a one or a zero, gray area is hard and pricing requires gray area skill. He basically teaches a process that starts out with something that is cut dry, it’s one offering with a standard price, and then eases them into more gray area pricing. I had something that happened today with someone who went through one of our recent intensive events where we got an e-mail from her, she was talking about the success of implementing our process for value pricing in her business, the success that she had, and then it was interesting. I saw the title for the episode at the same time and I realized, you know what? We teach value pricing through a process as well.
Susan: We absolutely do and ours is different from the way Andrew does it. He helps people, eases people into it. There’s not a full fledged, go cold turkey, kind of approach to it. He starts with a fixed price on their core offering, which is a compliance taxes to us Americans. Then value prices the rest of the services off of that, and then from his episode what we learned is that, then, the accountants learn over time that they don’t like to do the compliance anymore. They hand that off to the lower level employees and they take on more of the value work. That makes them happier. What we’re teaching is the process, is more how to get to that part earlier. Of course, we’re usually working with smaller businesses as well.
Kirk: Even an accounting firm is a small business, right? To me, anything under 100 people is small. To some people, anything under 1000 is small. It’s just degree of scale, as far as I’m concerned.
Susan: No, I agree with that. When you’re talking about one person or three people making a commitment to change the way they do business, it’s a lot easier than turning a ship of 100 people. You can still get it turned, and some can do it quicker than others, depending on how they’re set up, but his sets up a process so that even the “lowest” level employee is going to still be very involved and have work to do and not be waiting on or trying to figure out, “How do I value price how I do a tax package for somebody?”
Kirk: Right. I see what you’re saying. He’s created a process so that even though value pricing on the high end, what Andrew calls the advisory end rather than the compliance end, requires a great deal of soft skill. You’re saying he’s created a process that makes it more a hard skill that someone who’s just entry level, who may not even understand the full concepts, can still operate within the value pricing business model. He’s created a framework that makes it easier to bring somebody in and get them started.
Susan: And he can hire an accountant without doing a time sheet who just does compliance at a low level, a low entry level point. That’s a big plus to those firms that sign up that way of being able to recruit some actual better talent to their teams.
Kirk: Right, essentially what he’s doing is he’s saying, “Just get off the bloody time sheet, start fixed pricing and so let’s come up with a standard offering that’s the low end work, the commodity work, the compliance work. Let’s just offer it as a standard package, but present it in a way that makes it easier for the customer to buy.” Just the fact that you’re selling it at a fixed price, that you’re presenting it as a package possibly with options, sets you apart and allows you to offer something to the customer in a way that they’re going to perceive as more valuable because it is, but also allows you to get out of that hourly mentality. It actually is a win for both.
Susan: Right, it works out on both levels.
Kirk: I guess what struck me about Andrew’s episode is just this idea of it really never occurred to me that you could ease into value pricing through a process. For me, I’d always thought, “You know what? You just got to bite the bullet, you got to make the commitment, you got to jump off the cliff,” and I still think you do on the top end, on the advisory work, but he’s working with a group of people that are resistant to it and so he’s found a way to get past the resistance by providing more structure at least on the early end.
Susan: Especially as he mentions accountants, very structured people. This whole touchy-feely value pricing thing is scary to them, more so than probably other types of business owners. This gives them a nice bridge to be able to do that.
Kirk: What we teach is similar in that we are teaching a process, but we’re teaching a sales process so the e-mail we got today that I’m alluded to earlier, our customer was saying, “Look, I applied it with this customer and here’s what happened. Here was the reaction. Then I tried it with the phone on another customer,” and basically what she was saying was, “Oh my goodness, just because I had the process and I followed it, the outcome was better.” She wasn’t even talking about a final outcome of presenting options, and getting a signature, and getting payment, she was just saying the sales conversation was going faster. It was easier and more fun.
Susan: Right. She’s getting to know her customer before she even really speaks to them the first time through the process that we shared with her.
Kirk: I’m not so much the process guy, right? I enjoy loose structure, strategy, that’s me. I’m realizing there is value in process, I mean, there is, period. I know that, but particularly, not only in teaching but in implementing value pricing, I’m seeing more the value of the process particularly for the people that are not so much wired the way I am.
Susan: Which is a lot of people, Kirk.
Kirk: I realize that. We talk about personality types sometimes and I don’t want to get into a full-blown discussion of the [DISC 00:10:29] profile is one that we’ve used, but let’s just say that I’m in the minority by far.
Susan: Yes, most people are not all one thing, but it takes all of us different personality types to make the world go around.
Kirk: Any other reactions from Andrew’s episode, anything that stood out to you?
Susan: I liked his approach of easing people in, giving them a way to feel it out without feeling like they’re giving up on everything that they’ve always known.
Kirk: Exactly, whereas my approach would, and we don’t do this because I know it doesn’t work for everybody, but my personal approach was, “All right, just tie the big lead ball around my ankle and throw it off in the water and here I go.”
Susan: Well, there are a lot of mistakes made along the way because of that too. It makes it a lot easier to have already learned from those so that we could share with others how to avoid that.
Kirk: There you go. The D’s way to learning value pricing versus S’s way to learn value pricing.
Susan: There you go.
Kirk: All right. You had had some thoughts about TurboTax. What are you thinking about?
Susan: It kind of ties into accounting here, doesn’t it? I have a side hustle, I’m a professional organizer and do some closet cleaning and stuff for friends. I guess I’m also a small business owner. When you come to do your taxes as a small business owner with a side hustle, yeah, I’m not hiring an accountant because, quite honestly, if I did, I’d have to hire a cheap one and sometimes you get what you pay for. I do my own. I was just impressed. I’ve used TurboTax for years and they are not paying me for this plug. I’ve used them for years and I was just impressed as you go through the process with them how great they make it. You basically answer their questions and they walk you through the whole thing.
At the end, they can tell you which of their three, it’s really four, but three options, that you need to purchase to file your taxes based on what kind of setup you’re in. They have their free edition, it’s very simple. 1040 easy or 1040 A, free package. The three they sell, they have one that is it’s just your personal stuff, but you have a lot of tax deductions, that kind of thing you need to deal with. They have another one, if you own investments in rental property that you have to handle, that one’s called premiere. Then their third choice is home and business. That’s the one that applied to me. I’m self employed, small business owner, and I’m also employed by someone else. It let me bring in W2s from our business, my husband’s W2s, all that, and then also track all of the small business stuff. It just struck me how important it is that, well, first, how hard taxes are because there are so many things that you get involved in and you start saying, “I don’t know. Can I do that? Is that the right thing? I don’t want to come back and owe $5,000 because I made a $10 mistake.”
TurboTax even gives you a place that you can go ask questions to the community and there are accountants that will answer the question for you. For all of you small business owners out there that might not quite be at the place to hire an accountant, it’s a great option. You should look into it.
Kirk: It’s interesting as I’m listening to you describe it, the first thing I heard was three options.
Susan: I knew you would.
Kirk: Now, granted, these three options were based on the type of business, so it’s not like you could’ve picked all three, right? The one for real estate had no application to you. It’s not exactly three options, normally when we talk about presenting options, you want to present three options that any of which would benefit the customer but at the same time, you still had three options or three types, right? That was interesting. Obviously, we have a lot of accountants that listen to the show and we talk a lot about how accountants can do business, implement pricing. Some accountants of our audience may be not so high on using TurboTax, but I want to point out we’re talking about two different audiences.
Susan: Right. The accountants we’re talking to, they’re obviously good accountants. I’ve had a couple of experiences … I think I’ve been using TurboTax probably for 10 years, if not more. I was probably one of the early adopters of it. During that time period, I had two specific years that I thought my taxes were just going to be a nightmare. I went to an accountant and in both cases, I was horribly sorry after I did. I was getting stuff back that I was correcting their mistakes, things I had taken to them in early February, they were giving me back on April 13th and it was wrong. I think you run into that when you can’t afford a really good accountant and really good accountants are invaluable but being able to afford an invaluable accountant is a challenge. This is another option. I agree our accountants would not … They can offer way more value, but it’s a value that some very small business owners, they can’t afford the value so it doesn’t matter whether it’s there or not. They can’t do it yet. They’re not there yet.
Kirk: I know this is not the area where you were thinking, but I couldn’t help have this pop through my head because of who I am and what I talk about, but maybe at least one defining characteristic between a good accountant and a not good accountant is whether they go by the hour or not.
Susan: Well, I was certainly billed by the hour on the two bad experiences I had, if that says anything.
Kirk: We talk so much about the downside of the billable hour as a business model, but I’m beginning to think that calling it a business model is wrong. It’s not a business model. It’s just a, “Oh, let the clock run.” A business model requires intentionality. Where is the intentionality in a billable hour? “Oh, I’m intentional to show up for work and put in my time. Oh, thank you.” Everybody has 24 hours in a day.
Susan: My experience with the accountant where I had to correct their work and fix it for them, I’m sure that when I sent it back that I got to pay for that as well.
Kirk: I’m not saying it happens in every case, but if you’ve been quoted a fixed price, it might’ve been the same or higher as hourly and you would’ve been happy to pay it, but you wouldn’t have had the bad taste of, “Oh, I got to pay for their mistakes.” You didn’t know if they made mistakes or not, you just know you got the return.
Susan: When I used to work at my ad agency, we had the same thing where we would have customers say, “I found a typo, I don’t want to pay for that mistake. I don’t want to pay for you to correct that,” because we billed by the hour. Okay, well, once again, if you had said, “This ad cost X dollars,” then there wouldn’t have been an issue, that whole topic wouldn’t have come up. “Hey, I found a typo, can ya’ll fix it?” The end.
Kirk: Is there anything else we want to say about TurboTax?
Susan: No, I think we covered that and I got off topic there a little bit.
Kirk: The next thing that I thought we would talk about is something that popped in my head this week. One of the questions I hear quite frequently is how can I apply the concepts of value and pricing when, essentially, what I sell is packaged by the hour? I really have realized that I think, when you provide a service, and it’s time bound, that really is part of the packaging. Things like massage therapy or counseling. Counseling was the one that I thought of this week and I was just like, “Gosh.” I have a friend who’s a counselor and in the practice, they try to fill up the day with six or eight clients, whatever they have time for, they’re always, “Okay, it’s a 45 minute session, we got to hard stop. Even if we’re in the middle of something, we got to wrap this up and pick it up next week.” I start thinking, “What would it look like to implement value in counseling?” What if, for number one, the session wasn’t bound to just that specific time. What if there was a perception both on the part of the counselor and their client, that number one, you know what? If we get things handled earlier than the time, then we’ll stop early. Or, if we’re in the middle of something, we can go on past the normal expected time.
For example, one possible model or application of this might be, “Okay, a typical session is 60 minutes. What if you allowed for up to 120 minutes? What if you didn’t pack the day with eight appointments, it was packed with four and you built in margin to allow sessions to run long, maybe have one session that ends early, somebody else shows up for the next appointment early, you could bring them in.” You brought up the idea of concierge medicine which, I guess, part of what I’m describing might be called concierge counseling.
Susan: Right, when we were talking about that the other day, I was referring to the show on TV called Royal Pains, which it’s lighthearted, but the whole premise is that there is this doctor that works in the Hamptons and he’s hired by the rich and famous just to be their doctor. He comes when they call. He’s paid on a retainer type basis and there’s not insurance to manage, you don’t go to an office and schedule, although he does have an office if you want to come to that. I had a doctor that actually switched to that policy recently, as well. She doesn’t take insurance anymore, she charges a certain amount per month per person. Then, yes, she’ll bill for extra services too but that charge per person per month is really an access level agreement. She won’t even see people that aren’t signed up on that with her. That builds a margin for her right away.
Kirk: I think the further we can get away from time as how we measure what we sell and the way customers think of it, the easier it is, number one, for us to provide more value and then the easier it is, number two, to actually charge for the value. In fact, I was thinking about concierge counseling. I was like, “Man, what would be the value of if I need counseling, I could get in tomorrow?”
Susan: The same with massage therapy. You think about that too. Sure, you could set up an appointment every week or every month or however you want to do it with your massage therapist, but what if you get that crick in your neck and you can’t turn your head, you know? I want to go today and how do you get in, or tomorrow? I guess the good ones might be busy, anyway, no matter what. Then they also, if they had something set up like that, they might be able to only go with the patients that they wanted to see. Just like there are customers we don’t want, I am sure there are patients they don’t want.
Kirk: Kind of like on call massage therapy, right? This would maybe be incorporating the idea of access into it. All right, when you call, our standard is one week or you can pay a premium and get three day access, or you can become one of our exclusive VIP club members, and by the way, we only take ten of these so you’ll have to put your name on the wait list, but these people you call within 24 hours.
Susan: I like that. I do think that you’d have to have probably a little bit more of an exclusive clientele for that, but you could probably attract it with those types of offerings.
Kirk: The whole concept of value pricing, it is not a business model for running a commodity business.
Susan: Right. You’re not going to run Massage Envy that way.
Kirk: I’m not disparaging, for example in this case, Massage Envy, there is a need in the market for businesses that are run more on a commodity, but there’s also a need for ones that are not.
Susan: Absolutely. I’ve been to Massage Envy. I actually like it. You do lose out. It’s, again, the value you pay for. Here’s your $49 massage but you might not … The person that you like might not even work there anymore from week to week because it’s a commodity, because of how they’re selling it. That’s the value you lose for the money that you are willing to pay.
Kirk: That’s been my experience. I tend to go through … When I find somebody at Massage Envy that I like, I will only book with that person and I’m willing to wait a week or two to get in to see that person. When they leave, oh my goodness. Now I’ve got to go through three or four, usually, to find somebody that I like. I’m just that picky, I won’t just take whoever available.
Susan: Their price reflects that. Their offering reflects that.
Kirk: All right, you had something about Home Depot that caught your attention.
Susan: Yeah, this was very interesting. My husband heard this on the radio. I actually looked for an article or anything to get more details, but I liked the concept enough that I wanted to bring it up. I wasn’t able to find an article. Home Depot recently changed it’s return policy from a 30 day return limit, you know, 30 days it’s expired, it’s yours kind of thing, and expanded it to a 90 day return policy. The side effect of that was it decreased their returns by 50%. I thought that that was so interesting giving people an extra 60 days to bring something back changed the mentality of, “Well, it’s mine now. I own this now.” Or, perhaps, “I just lost the receipt,” but it gives people less urgency to go return something and then it more genuinely feels like theirs. That was my perception of it. You might have a different one.
Kirk: I think it’s interesting. Here’s why I think it worked and I know nothing. You literally told me about this five minutes before we started recording. I think why this has worked, why they’ve seen returns go down, I guess it’s really two reasons. Number one, I think customers are more willing to buy because Home Depot is saying, “We’ll take on more of the risk.” Everybody’s used to a 30 day return policy. In fact, you know, and we won’t talk about the store or the item, but you know I was watching the calendar on something we bought because I was thinking I might return it because I wasn’t sure I wanted to keep, and this was something that was a few hundred dollars. I knew when the 30 days date was, but who can remember … You could, but nobody else could remember the 90 days date. By then, it’s out of your mind.
Susan: Oh, you know I’ve got something that expires in seven years on a car warranty that’s on my to do list, right? You know that.
Kirk: Yes, I do.
Susan: But the average person is not me. The other thing that a lot of things happen at Home Depot, people will use it as almost like the Home Depot “rental” where I need this saw for today, but after today, I’m going to return it because I only needed for this one thing. Home Depot has been fairly flexible about allowing that. It’s interesting, to me, that I think the same thing happened there. People used it that one day and they thought, “Well, now I have 90 days instead of 30 days, so maybe I could use it again,” and then it feels like ownership. I wonder if there’s a moral thing that switches off in your head that way, too. I don’t know, very interesting that that was the result of that.
Kirk: I don’t want to get into the discussion of whether it’s right or wrong to rinse something … Rinse something? Buy something, use it for two days, and bring it back, get a free rental. I don’t feel comfortable doing that. Now, I do do it sometimes to evaluate audio equipment but when I’m doing that, I’m usually doing it because I’m trying to review the unit or because I have an arrangement with supplier that I can do that.
Susan: All right, I’ve returned clothes before, but I’ve never been the woman that’s gone to the party in the nice dress and brought it back the next day. There are certainly people that do that as well. If you want to try it on, show it to your husband, see what they think, I don’t have a problem with returning in general but the … I just think it’s interesting the ownership changes. It’s like a state of mind change, very interesting.
Kirk: Yeah, there’s a psychological thing going on on both ends of it, right? There’s a psychological thing on the beginning that I referred to earlier about the transfer of risk, but there’s also a psychological thing on the end. What you’re implying is, “Okay, if I’ve had it for 29 days, yeah I’m going to return it.” I’ve had it for 89 days, oh, I don’t know. Right? Who wants to be the person bringing the item in with the receipt that was dated exactly 90 days ago.
Susan: Right. It’s kind of the, “Oh, sorry, I just got in,” you know? By the, what is it? Skin of your teeth?
Kirk: I will say this, it’s also an example of being innovative, of going the opposite direction, right? It’s an area of this in pricing is, a lot of times, we will say that nobody got fired for hiring IBM that you actually raise your price and it makes you more desirable. The same kind of thing, you extend your return policy and your returns actually go down.
Susan: I don’t know what inspired it, I wish I could’ve found a detailed article about it to see what was the marketing idea behind it? Was there something that they … Were they going to use it to sell better, or to compete differently, or … I don’t think that this was the expected side effect of it.
Kirk: It would be interesting to find the person at Home Depot who came up with the idea, who is probably not the same person as the one at Home Depot who had to approve the idea and talk to the both of them and go, “Okay, what were you thinking when you decided to do this? What results were you expecting?” And then compare that to what actually happened. That would be a fascinating conversation.
Susan: That would be great. Anyone out there from Home Depot that was involved in this, leave a comment and we’ll reach out to you, and we’ll get you on the show and talk about it.
Kirk: We are looking for the CRO, the chief returns officer.
Susan: There you go.
Kirk: I want to talk a little bit about I just did a podcast interview this afternoon and I just want to be straight, this thing is fresh, maybe a couple hours ago, and I really want to talk about the interview because literally the person I was interviewing, the topic I was interviewing them about, they were applying it to me during the interview. I’ve never had that happen before and I honestly haven’t had a chance to listen to it, I don’t know how good of an episode of it is. I’m not sure if I’m going to release it yet, but basically, I was interviewing an author who’s written a book about frame control in sales conversations. The idea of frame control is that everybody comes into a conversation with a perspective and you can think of those perspectives as frames, and those frames will collide. When they collide, you have a frame collision. At that point, one frame’s going to win and one’s going to lose. Not win or lose as in win business or lose business, but in the context of have control of the conversation, be able to push their goal forward in the conversation. It’s also this idea of being intentional.
Anyway, and this book which I’m not going to name the book or the author right now because I haven’t decided whether I’m going to release the episode. The book is about pitching in investment markets. These are deals with hundreds of millions of dollars on the table and you may only have 20 minutes to present and close deal. Stakes are high, you’re dealing with very intelligent people, people who are very used to being disruptive and all that kind of stuff.
Susan: And people that are used to being in charge and in control and are usually very type A personalities.
Kirk: Lots of egos.
Susan: Yes.
Kirk: What I wanted to do in the interview was talk about applying this concept of framing to value conversations. I don’t think it transfers 100% because I don’t think a value conversation is such a battle of egos. It can be at times, but it’s not always. Whereas these high investment deals are a lot more driven. It was interesting, twice during the interview, the person I was interviewing started applying frame control to me, particularly around the area of timing of the interview. The first time I said, “Let’s talk about this topic next,” and he goes, “Well, I don’t know if we’re going to have enough time, what are the other two topics you have?” I got called on the spot so I said, “This and this.” He said, “Well, let’s talk about this, I don’t think we’ll have time to get the other.” Never had anybody do that to me on an interview before, what’s your reaction to hearing that?
Susan: I think it’s interesting. It’s certainly … If it is somebody that needs to manage their time wisely, I think it totally gives you a way to do that, to drive that into your schedule. If you have back to back calls, if you’re a counselor that has the next patient coming up and you know you have to make that break in a certain amount of time, it’s a very interesting philosophy. I think that you have to use it on the right people, I don’t think you could use it on people that weren’t, perhaps, investment bankers, because they get their feelings hurt or they wouldn’t like the approach and they’d think you were too pushy. I think you would have to be very careful with how you used that process.
Kirk: I agree. There’s some relationship integrity that, number one, you need to have, number two, you need to respect theirs and balance it. You don’t want to push so far that you go past that imaginary line which is in different places, depending on the situation, who are the individuals, what are the organizations, et cetera. It was really interesting, to me, that … I literally recognized it as soon as he did it. I knew it. Now, the first time he did, I didn’t realize it til right after he did it and that point, I didn’t really have an opportunity to think of an out, per say. I just went with it and was chuckling. In fact, I said to him, we were on Skype, and in the chat I said, “Hey, I like how you’re applying this stuff to me in the interview.” I guess I did respond. I let him know I knew.
Susan: Do you think if you had not already read his book where he outlined it, do you think you would have realized it?
Kirk: No.
Susan: Interesting. He also gave his secrets away by writing a book about it, right?
Kirk: I don’t know why, what he was thinking. He literally may have looked at the clock and said, “Oh, I need to make sure we wrap this up.” He might’ve been getting bored, he may not have liked the direction we were going, I don’t know. I’m speculating here. There could have been a variety of reasons, but yes, I did realize what he did because I’d read it. Then, the second time, was later in the interview. He was trying to wrap it up and he was going, “All right. I’ve got to do this thing and move on to this next thing. We need to wrap this up.” This time, I was prepared because I’d seen him do it once so I said, I said, “Well, I’m glad you want to honor our time, I do too. We’ve got 12 more minutes by my watch so let’s go.”
Susan: You know, it’s interesting. I remember from when we invited this person to the show, he responded to the invitation almost immediately. We didn’t get a whole lot of e-mail communication back and forth, there weren’t a lot of questions. He said, “Yes, I’ll do it. Send me a link.” He chose a time and everything was very immediate. You could tell he doesn’t waste time. He makes decisions quickly and he moves forward quickly. It seems like some of that framing in the sales reflects his personality, too, or at least his working style.
Kirk: Oh, I would completely agree. Part of one of the things we talked about on the interview was he thinks that an average meeting has about 20 minutes length of what’s going to be accomplished and after that, the rest is fluff.
Susan: Yeah, I think he’s probably right there.
Kirk: Yeah, so part of his thing is, “Let’s not waste time. Let’s get in, let’s get to the matter at hand, that’s part of the framing.” It was just interesting. I have never had an interview before where I could literally tell that what we were talking about was being applied to me. It was just a surreal experience.
Another idea that we had that we wanted to talk about was adapting processes, particularly in the context of, maybe, software, particularly SAS software. What were your thoughts?
Susan: Right. This is something that came up, I think it was a comment that I heard on another podcast. Somebody was talking about how off the shelf type products or software as a service type products don’t work for them. In our custom software business, we’ve run into some people who have said that too, but then you start getting down to the nitty gritty of it and it’s like it all totally works except for this one thing that you wished it would do, or that you don’t know how to make it do. That’s not the same as it doesn’t work for me. In this instance, they were talking about … It was a software development team. They were talking about how Basecamp, specifically, doesn’t have a way of managing bugs so they don’t use it in their business. It just kept going through my head, “No, you’re right. Basecamp does not have something called a bug list.”
Now, I do believe that there are add-ins and things like that that you can actually add where it does, but we use Basecamp and we manage bugs in there because we developed a process to do it within the framework of what the software as a service provides. To me, I think that people want things off the shelf because they’re the value they’re willing to pay, right? Custom software is $35,000, Basecamp is $35 a week or a month, not sure that that is the exact right pricing, but it’s somewhere in there. Totally different perspectives, but they would totally give up on Basecamp because they couldn’t spend an hour of their time to think of a process to make it work for them. I think that that’s very interesting because if you’re going to develop the custom software, you’re certainly going to spend more than an hour of your time trying to develop exactly what you want. That one hour that you could sit down and say, “Okay, this is what we need to do. What are the tools that are offered to me as part of this, the value I’m purchasing, and how can I even make that more valuable to me by developing my own little workaround or my own little process that solves it?
Kirk: It strikes me that there is a balancing act, right? There is in everything. There’s right and wrong, and all sorts of other ones, right? What’s the context, but the idea that, “Okay, when software doesn’t work as you would like,” and we’re distinguishing this from does not work as expected or a bug. We’re not talking about a bug. We’re talking about the feature. You can get what you want done, it’s just the features not implemented the way you’d like or the feature doesn’t exist. Then, the question is, “Is this a context where I need to adapt my process to the software or we need to go back and revise the software?” In some cases, like with SAS software, you cannot … I mean, yeah, you can submit a feature request and it might be implemented in three, six, or twelve months.
Susan: If they think it’s a good idea and is giving any extra value that they could charge for, perhaps.
Kirk: The keyword there is if. I’m not saying it will happen in three months, it might, or it might not, but with custom software there’s the idea that, yeah, you can, in most cases, get that implemented. Then you have to look at what’s the value? How long will that take? Are there higher priorities? What’s the investment to get there, what’s the return and so forth? In that moment when you say, “Does not work as expected, the way I want,” evaluate both options. So many people just assume, “Okay, I’m not going to use the SAS software because it doesn’t do this or, “The custom software is bad because it doesn’t work this way.” Well, you know what? Back up a little bit. Could you adjust your process and how important is this priority?
Susan: I think that adjusting the process is also different from what I’m talking about which is creating a process that works for the software. I have had the experience of adjusting my process as well, way back when when I worked for the ad agency and I had … FileMaker was the tool that we used, it was a custom tool. It was very well developed and it was very well thought out. It was something we added to over multiple years of adding new features and really cool stuff. Very high functioning piece of software, but we changed the way the agency ran. There were things that we did totally different because we had that piece of software. Things that it could do that then let us a process and things that it didn’t do that we reevaluated and said, “Do we really need to do that? Do we have to do it anymore?” Because now we have a software to do it. You can use those same things whether it’s custom software development, whether it’s some high end oracle type thing or it’s software as a service off the internet for $10 month. It’s just being creative in your process, which I think is interesting that we’re talking about process as the beginning as far as implementing value pricing as a process.
Kirk: There was a theme to tie this episode together.
Susan: Yeah.
Kirk: It’s interesting, we’re talking about at least three different things in this point, right? We’re talking about number one, can you create a new process? Number two, can you modify an existing process? Or number three, do you need to change the tool? I would add number four, do you need a different tool altogether? Maybe five would be why do you think you even need a tool, is this a problem worth solving? There’s five different things to consider there.
Susan: No, there you go. I think that’s one of the first ones is certainly something we always ask in our process is what are you trying to accomplish in your business with this tool? How are you doing it now? Is it working, is the cost to actually do this a different way going to be extreme? You know what, maybe you can’t afford beyond putting sticky notes on your computer screen. Maybe that actually is working for you. I personally think that that’s a horrible solution, but in some situations, maybe it works.
Kirk: It’s always interesting when somebody says, “This does not work,” or, “This is a bug.” When you dig in and see, is it truly something … Now, obviously, if it’s supposed to add a record and it doesn’t or it’s supposed to delete a record and it doesn’t, those are bugs, right? More times than not, it’s either a matter of convenience or something they thought of that they thought would be a great idea. Our Curtis McHale who, by the way, will probably be our guest on the next episode if things work out, he talks about the fact of just because you said, “I’d like to have, or I think it’s cool,” no. We got to get past, “I think it’s cool.” What’s this going to do for you?
Susan: I think that that’s something we’ve actually talked about on a previous episode that you and I did together where we talk about creating the wishlist for people to put the things that are top of mind that they think are cool, that they’d like to change. One of the things I find interesting is when you come back to that, a month later, two months later, whenever they’re ready to tackle it. Some of those things, they don’t even remember what they were asking about at the time. It was just something brilliant that popped into their head at that moment, they hadn’t put any thought to it. If you were just billing them by the hour and you just did it, now they have a feature that they may not ever need or use, or maybe didn’t even want that bad. You just reacted.
Kirk: Using passage of time, so there’s a sixth option, right? Just wait. See if in 90 days, this is still a priority and sometimes you know it is, right? When you know it is, it’s because you can justify it by a dollar or time saved or some other thing that you can go, “Look, if we do this, here’s the result and here’s why the result is a result we need to pursue.” When you can’t do that, put it on the wishlist and see if it survives the 90 day wait. Anything else that we want to mention on any of these ideas?
Susan: Think so, I think we did a great job covering them and wrapped them up with a pretty bow tie in to the first topic.
Kirk: I would like to know are you, the listener, interested in more of these episodes? This is something we’re trying. We’re calling it an un-episode and our idea is that if we get some good feedback on this and people like these more unscripted conversations, we’re going to introduce this on a regular basis. We may even try it in some different formats. We’ll try it here on the podcast and there are some other ways. We might do something with video at some point. We’re just experimenting and love to get some feedback from you. You can leave feedback on the show notes page for this episode at ArtofValue.com/86. Give us some feedback. Hit us up on Facebook. Speaking of Facebook, we do have a free Facebook group called the Art of Value Society. That would be a great place for you to go and let us know what you think about this. You can join by going to ArtofValue.com/society.
Susan: Both Kirk and I are actively involved in responding to comments and interacting with people on there. You get some direct access to us that way too.
Kirk: Yeah, and I’ll add if you’d rather have direct access to Susan rather than me, that’s a way to do it.
Susan: I’ll talk to you about process.
Kirk: This has been fun, I enjoyed it. We’ll see if other people feel the same way.
Susan: I hope they do. It was fun.
Kirk: My favorite part of this episode was our discussion about packaging services by the hour. Not pricing, but packaging. There are some services where it makes sense to offer them to the customer in a time bound manner, but you don’t want to price it based on time. You may even want to make that a loose packaging so that you can shorten or lengthen a session based on the results the customer achieves or needs. If you’d like to get our summary of this episode, go to ArtofValue.com/86. If you’d like to get more information about the Art of Value Mastermind that gives you weekly access to me, go to ArtofValue.com/mastermind. My guest on next week’s show will be Curtis McHale. We’ll discuss his new book, Writing Proposals that Win Work. Until then, go create more value.
Announcer: ArtofValue.com.