Everyone knows that AI is destroying labor-based pricing.

But every week I encounter advisory businesses like ad agencies, consulting firms, legal and accounting practices — large and small — that are still selling time.

And I’m stunned.

Sometimes the rationale is that their clients’ procurement departments continue to insist on it.

Of course they insist on it! It’s in their interest to pay you for your time when your productivity is accelerating rapidly!

(That’s two exclamations points in one paragraph — a clear violation of the only entry in the Win Without Pitching style guide. Do you sense my alarm? Do you share it? Are you awake?)

Time’s Up! is the name of Ron Baker’s most recent book on subscription pricing models (co-authored with Paul Dunn). It could not be more aptly named. Time is indeed up on the business of selling expertise in units of time. And good riddance.

Subscription models don’t work for everyone — and there’s much more that needs to change in this type of model than just how the firm prices — but it’s one worth exploring.

As is productization. 

As recently as 2018 with the publication of Pricing Creativity I was lukewarm on productization for many expert advisory businesses. I’ve had to eat those words and change with the times.

Subscriptions.

Productized services.

Unified programs and platforms.

Outcome-based retainers.

Value pricing.

Performance pay.

All these models are still valid in the age of AI. Some can be combined. All have implications beyond just changing how you charge.

Changing your revenue model (how you’re paid) will impact many things, including:

  • Staffing structure
  • Service lines and tool selection
  • Type, size and spend of client
  • Size of client roster
  • Your culture (sooo much about your culture)
  • Who sells and how

If your rationale for clinging to the time-based life raft is your client’s insistence, let’s talk in six months after they explain to you that:

A) They’ve moved most of what you do for them in-house, and

B) They’ve hired a smaller, younger firm to do the leading edge, AI-powered stuff that they — and you — cannot do.

I can’t predict how your ex-client will pay that new firm, but I know they won’t be buying time.

Time’s up, babycakes. The raft is going down. Are you going down with it or are you going to start swimming?

-Blair