Storytelling may be the ‘next big thing’ in pricing strategy, if you believe Ty Montague, author of the new book, True Story: How to Combine Story and Action to Transform Your Business.
Last month, Montague penned “If You Want to Raise Prices, Tell a Better Story” on the HBR Network. Montague suggests “the power of story to affect pricing still remains unknown, or at least it’s vastly under-utilized.” He retells a story from New York Times Magazine columnist Rob Walker’s 2006 business book, Buying In: The Secret Dialogue Between What We Buy and Who We Are:
a can opener is a can opener until it is a can opener designed by Michael Graves and a part of the permanent collection of the Museum of Modern Art. A shoe is a shoe is a shoe until it is a pair of TOMS. … Suddenly, these objects are a part of an inspiring narrative — one that I can use to reveal something meaningful about myself to others. That’s something I am willing to pay for.
Montague concludes that “an authentic, meaning-rich story becomes the most important ingredient to drive a company’s margins up.” (To read the full blog: BLOG POST)
For the legal industry, Montague raises two significant aspects of pricing that, as-of-yet, are little discussed: branding and willingness-to-pay.
Branding. Law firm’s marketing departments embraced branding nearly twenty years ago…as a marketing communications strategy. What has been missing over the decades is the role branding plays in pricing strategy. Successful branding helps prospects 1) understand what the firm’s benefits are and how they create value, and 2) desire the firm’s services over the competition. Branding is a broad, “one-to-many” strategy–ideally based on differentiation–that raises prospects’ awareness and knowledge of a law firm.
Willingness-to-Pay. Harvard Business School’s strategy master, Michael Porter, wrote almost thirty years ago: “Value is what buyers are willing to pay.” WTP is an economic concept that, qualitatively, measures a buyer’s motivation to purchase and, quantitatively, measures a buyer’s maximum purchase price. In both cases, the buyer’s measurement correlates directly to his/her perception of value, which is directly influenced by branding and value propositions.
Value Propositions. A third factor, not mentioned by Montague, is the key role value propositions play in professional services sales. By creating a powerful story (or several) about your firm, you inevitably create value propositions — statements of benefits a client receives from your services. Value propositions are targeted, “one-to-one” messages based on the firm’s differentiation that are delivered by attorneys directly to individuals buyers.
I believe storytelling is a critical tool for price communication. The idea is not new to business, however. Annette Simmons (The Story Factor: Secrets of Influence from the Art of Storytelling and Whoever Tells the Best Story Wins) and Steve Denning (The Leader’s Guide to Storytelling) were the first to offer books on business storytelling more than a decade ago. Shortly thereafter, my favorite business author, Patrick Lencioni (WWW.THETABLEGROUP.COM), began publishing his series of best-selling business books, each one written as a fable.
In addition, the HBR Network has published several storytelling-related blog posts. Here are a few:
- A Data Scientist’s Real Job: Storytelling – BLOG POST
- Structure Your Presentation Like a Story – BLOG POST
- The Art of Purposeful Storytelling – BLOG POST
Storytelling is by no means universally accepted, but its core purpose — to resonate with an audience regarding benefits and value — certainly ties into a law firm’s promotion strategy. Perhaps it’s time for storytelling to tie into a law firm’s pricing strategy…which begs the question: Does your firm have a pricing strategy?