AI Billing / Value Pricing
If AI makes you 50% faster, do you bill 50% less?
That question is coming whether you've got an answer or not.
KPMG just forced its auditor to cut fees by 14%. $416K down to $357K. Their argument was simple: if AI cuts the work, the price should follow. And it worked.
If that's happening at the top, it's coming for everyone who bills by the hour.
Think about the marketing agency billing 20 hours a month to build a content calendar. AI tools cut that to 5. The retainer is still based on the old pace, but the client uses ChatGPT too. They know.
And unlike a Fortune 500 with their law firm, your clients are close enough to see exactly how the sausage gets made.
The move isn't to hide the efficiency. It's to stop selling hours entirely.
Value-based pricing captures AI speed as profit instead of surrendering it as a discount. "40 hours at $150/hr" becomes "we deliver these outcomes for this price." Your client gets predictability. You keep the upside when your tools get better.
One gotcha though: the AI tools making you faster aren't free, and their pricing isn't stable. If your margins depend on today's AI costs, what happens when your provider changes their model, or their prices?
5 questions to pressure-test your pricing model:
- Does your pricing reward speed or time spent?
- Could a client ask "why does this cost the same if AI does half the work?"
- Are you investing in AI tools while keeping the same billing structure? (You're building a case against yourself.)
- What are you doing that a client couldn't do themselves with AI and a YouTube tutorial? That's your real value. Price around it.
- If a competitor offered the same outcome at 40% less with an AI-assisted model, would your clients stay?
The professionals who figure out value-based pricing first don't lose the efficiency gains. They keep them.
What's your answer to #4?