Content seriesView full content series
Sage Summit Insight: The Future of Pricingby
Whenever a group of practitioners gathers together, talk will usually work its way around to billing and pricing.
Sure enough, pricing popped up as one of the first questions for British author Daniel Susskind when he discussed his book ‘The Future of the Professions’ at the Sage Summit in Chicago last week. After presenting his findings, Susskind (second from right above) took part in a panel discussion with (from left) Ed Kless, Ron Baker, Gary Boomer, Garry Carter, William Nahum, Doug Sleeter and Joe Woodard.
“Will changes in pricing practice from billing by the hour to a connected value basis help mitigate some of the things you found in your research?” an audience member asked Susskind.
Job displacement fears
With value pricing evangelist Ron Baker sitting stage right on the panel, there was some initial reluctance to field the question, but Scaling New Heights impresario Joe Woodard rose to the challenge by addressing the issue that worried most accountants about Susskind’s book - the impact automation will have on their jobs.
As Woodard explained it, the roles of thousands of accounting professionals who are not full service CPAs will be displaced through automation and artificial intelligence.
“A lot of people won’t be in the occupation when this happens,” he said.
“[Pricing] won’t help with the job displacement problem,” Woodard continued. “In what will be a smaller profession in the future, those that remain will be because they measure their effectiveness. Do we cause our clients to thrive? Then price against that measurement point. It’s not so much that’s the reason we’ll survive, it’s a characteristic of the pricing model of those who will survive. What makes them survive is not how they price, but do they measure on effectiveness?”
When Baker got a chance to speak he expressed despair at hearing accountants worry about the impact that automation would have on their jobs. “The value of a profession is not measured in jobs, it’s measured in output,” he said.
“Pricing is not a panacea for a lousy business model. Pricing is not going to help BlackBerry, for instance. You still have to create value. That creation of value comes from innovation. Growth comes from learning, through tested experimentation and innovation. Firms have to innovate and adapt and create value outside of themselves for their customers and make an effective impact.
Pricing is not a panacea for a lousy business model... You still have to create value - Ron Baker
“You want to race against [IBM supercomputer] Watson by the hour? I wish you the best of luck. If that’s your business model you’re going to be destroyed. Your business model has to change. But that alone is not going to make you prosper. You still have to create value.”
A contrary view from ICB chief
Few of the panellists were ready to take Baker on, but Institute of Certified Bookkeepers (ICB) founder Garry Carter broke with the value pricing consensus. “If you’re saying we’re going to do less work and just charge more for it, then the client is losing out. Clients will not lose out for too long,” he said.
Carter accepted the Susskind thesis that some accounting tasks would be taken away from people by computers and that a change from the traditional mind-set was needed.
“If we’re going to add a service, it doesn’t matter how we charge it. We’ve got to do the work that the client is willing to pay for,” he said.
After witnessing this clash of accounting cultures, Daniel Susskind dipped his toe into the pricing debate: “What we’re seeing across professions are people and institutions who have very little regard for the way professions have traditionally behaved, whether it’s about pricing, or face to face contact,”
Many professions - not just accounting - are changing how they work, experimenting with non-traditional approaches and solving problems differently; pricing was just one element within the wider shift.
But, in a nod towards the pricing iconoclast sitting at the other end of the line-up, Susskind added, “When you move to outcome-based measurement, there is a very strong focus on the way things are done. Anything that moves away from process to outcomes opens the door for changing how things are done significantly.”
Listen below to AccountingWEB's brief interview with Ron Baker to hear his summary of the panel session, and his reaction to feedback suggesting that "value pricing lite" is catching on within the profession in the shape of fixed-fee menus.
Where do you stand on the value pricing spectrum? Take part in AccountingWEB’s national value pricing survey to help us measure the rate of change within this area of accounting practice.
AccountingWEB's Head of Insight has been with the site since 1999 and likes to spend his time studying accountants’ technology habits. When not nerding out, you can find him exploring obscure indie music and searching for the perfect organic sourdough loaf from his base in Brighton, UK.