Smart pricing is based on insights from looking in the rearview mirror and reflecting over past work. Here are 9 questions to steer your after-action reviews to focus on the value you’ve created and using that to improve your pricing.
Effective pricing is about capturing and maximizing the value that changes hands when you work with a client. But how do you get better at that?
A great way to improve your pricing is through after-action reviews.
Wikipedia defines an after-action review as:
“…a structured review or de-brief (debriefing) process for analyzing what happened, why it happened, and how it can be done better by the participants and those responsible for the project or event.”
The after-action review is military in origin, but that doesn’t make it any less useful for civilian use
The fundamental reason for any look-back meeting, being an after-action review or retrospective, is that we can learn from everything we do. That learning can be made more effective if given a bit of structure. By systematically capturing insights, recording them and repeating them using after-action reviews, you increase the likelihood you and your team will, in fact, remember and learn from them.
Look-back discussions and after-action reviews tend to focus on the technicalities and practicalities of the work. Those discussions are worthwhile. But to use after-action reviews to improve your pricing, you need to steer the discussion towards the client’s perspective and their idea of value.
Here are 9 questions that make your after-action reviews sources of insight for improving your pricing.
Improving Pricing and Value Delivered
Did We Create or Add Value for This Client and Could We Have Added More?
This question focuses the after-action review discussion on the value the client gained from working with you. When considering that value, be aware of the impact of your work. Services are generally bought as a means to an end. Success is usually judged by how well those services help achieve those ends. By being aware of those ends and goals, you can increase how much value you create.
Did Our Pricing Capture a Fair Share of the Value We Created?
A way to look at prices is as a way to capture some of the value you create for your client. How large that share should be is a result of many factors. If your pricing power is high, a client may be happy to give away a considerable share as long as the whole engagement was positive.
If it seems the price was too low, as in the client paid a too small share of the value in price, use the after-action review to consider ways to recover the value. Reversely, if the price was too high, consider whether it’s necessary to make concessions that may strengthen your relationship with this client.
Looking at all this in retrospect during an after-action review, it may be clearer what the client gained from your work. Understanding what factors were important might help you make a better value analysis for future engagements.
What Were Our Costs for This Engagement and Why?
Calculating salary and other costs for an engagement won’t tell you what the price should be. But it will tell you about your margins. A cost analysis will also reveal where time and materials were spent. It will help you figure out what parts of the work that can be done more efficiently or perhaps even differently.
Lessons Learned and Knowledge Earned
If We Were Doing This Again, What Would We Have Done Differently?
There are always things to improve, as we all know. When you ask a team about it, the discussion tends to revolve around internal issues. My advice is, be careful not to get too focused on technical improvements regarding how your team does things. Instead, try to view this question from the eyes of the client.
Using an after-action review to discuss and understand what the client learned from working with you can open up new ideas for business development. The information and know-how that you shared with them can be used as a sales argument and listed as a benefit in your proposals. You can also repackage the information and turn it into its own product or service.
Did This Engagement Teach Us Anything We Can Use to Improve Our Services Generally?
Some engagements teach us things that others may find useful too. You can use the after-action review to make a list of those insights and discuss ways to share them.
Should We Share What We Have Learned From This Engagement? And If So, How?
Even the most useful learnings need to be packaged and communicated with clarity or they might go ignored. A great way to do this is for teams to regularly meet and share key insights at “super after-action reviews”.
If you’re a freelancer working on your own, you can organize your own after-action reviews by meeting with peers. I run a freelancer meetup group in Stockholm, Sweden for this exact purpose.
Learnings can also be shared using technology. For example, at my former agency, at the suggestion of a member of the staff, we built a system for sharing notes about third-party code modules. This enabled all developers working with us to take part of what others had learned without leaving their computer.
The Engagement’s Influence on the Client Relationship
Are There Any Needs the Client Has That Have Gone Unaddressed or Unmet by Us?
Unmet needs are a common blind spot for agencies and freelancers. It’s something we often don’t even ask about. So make it a habit to ask. It’s worth it. These unmet needs provide opportunities for new services or products you can develop and sell, creating new revenue streams for your business.
Did This Engagement Strengthen Our Relationship With This Client?
Even engagements that didn’t go according to plan can still make you come out as a winner. In service design, there’s a concept called service recovery.
Companies that are good at service recovery turn disappointed customers into raving fans. This simply by taking responsibility and fixing the mess they’ve caused.
If your answer to this question is “no,” consider whether this is a client you want to keep. If you do, decide how to make things right with them. This is something you can discuss at an after-action review.
Ways to Show Gratitude
How Can We Thank the Client for Their Business and for Entrusting Us With This?
Different people value different tokens of gratitude. For some, it could be a service, for others a gift.
A pastor named Gary Chapman wrote a whole book about this idea. While Chapman uses these ideas for marriage counseling, they can be applied to any kind of relationship. An after-action review could be the right place to discuss how you want to thank your client for the trust they’ve placed in you.
Some ways to thank your client could be:
- Coming and speaking to them about a topic they’re interested in.
- Providing a full-day robot-building workshop.
- Inviting them all to attend a sports game with you.
- Inviting them to a dinner paid for by you.
For more ideas, check out our client happiness idea generator at client.love.
Conclusion: After-Action Reviews Close the Learning Loop to Create the Insights Needed to Improve Your Pricing
As you can see, by focusing your after-action reviews on the value produced for your client, the discussion can be a source of insights for improving your pricing. In other words, you can produce more value and thereby capture even more of it.
These conversations can even produce ideas for new services and products to complement what you already do well.
What are your favorite questions for your after-action reviews and retrospectives?
Please share in the comments below.