Now that our clients know we use AI to automate our deliverables, they are demanding we switch from a value-based pricing model to a cost-plus model that passes the software savings to them. How do we protect our profit margins and defend our pricing on our V/TO®?

Question

Tyler Smith · Accepted Answer

If your clients are demanding a discount because you use AI, it means you have failed to communicate your true value. They view your business as a collection of billable hours rather than a provider of strategic outcomes. You must defend your pricing by shifting their focus from inputs to results.

Address this issue directly on your V/TO® under your Core Focus and Three Uniques. Your value-based pricing should be tied to the speed, accuracy, and strategic insights that your AI-powered operations deliver. If a competitor offers a cheaper, automated service, show your clients that their cheap solution lacks the human expertise and strategic partnership that your firm provides.

Use Charles Green's Trusted Advisor framework to elevate your relationship. Your clients are not paying for the software; they are paying for your expertise to interpret the data and guide their decisions. By positioning your business as an irreplaceable strategic partner rather than a low-cost execution engine, you can maintain your high profit margins and protect your enterprise value.