Dave: Hi, this is David Spray. Welcome to another episode of my podcast. My interview with Ron Baker, my guest today was really a treat and truly a bucket list item. Ron, his writing has literally added millions of dollars of value to the businesses of our clients and my various businesses. He is an amazing thought leader. And if you are an accountant or an attorney with clients, the insights he has are just amazing, but even if you have a non-professional services business, the ideas he has on pricing and how to create subscription for all kinds of businesses is really interesting. We had a wide ranging conversation. He had lots of great examples, and I hope you enjoy this episode as much as I did with Ron.
Welcome to the podcast today. My guest is Ronald J. Baker. Ron started his CPA career in 1984 with KPMG's private business advisory services in San Francisco. Today, he's the founder of VeraSage Institute, the leading think tank dedicated to educating professionals internationally, and a radio talk show host on the www.voiceamerica.com show, the Soul of Enterprise. He's the author of seven bestselling books, including two of my favorites, the Professional's Guide to Value Pricing and The Firm of the Future.
Ron has spread his value pricing message to over 200,000 professionals around the globe. He's been appointed to the American Institute of Certified Public Accountants group of 100. He's been named to Accounting Today's top 100 most influential people in the profession. He's been voted among the top 10 most influential people in the profession. And last but not least, he was inducted into the CPA Practice Advisor Hall of Fame in 2018. He graduated in 1984 from San Francisco State University with a bachelor of science in accounting and a minor in economics. He presently resides in Petaluma, California. Ron, welcome to the podcast.
Ron: Thanks, David. Happy to be here.
Dave: Yeah. I am so happy to have you here. I've wanted you to be a guest really since I started the podcast a couple of years ago, and I'm glad our schedules finally aligned.
Ron: Absolutely. Yeah. It's a little bit easier to get guests, isn't it? During COVID? Well, that's what I found.
Dave: Yeah, that is for sure. So I want to start off by giving you a sincere heart felt thank you. I don't know if you remember how we first met. Do you remember how we first met?
Ron: I do.
Dave: Okay.
Ron: You came to Las Vegas.
Dave: I did. I did. I've listened on account of a webinar with a group of attorney advisors. And I was on this call and I remember why, and you were speaking about value based pricing. I was so blown away. I reached out to you and said, "Hey, I'd love to meet." And you said, "Well, I'll be in Las Vegas at this AICPA thing. I can meet with you there." And I literally booked a flight, went there just for the sheer purpose to see you. And I heard your talk. We had a drink afterwards and that was about 15 years ago. And since then, that has resulted in probably 500 clients of our firm having more value from our service and our service is more valuable. Between us and the clients, you've probably added millions of dollars in value and probably no single person on earth has added more value to my business than you. So, thank you.
Ron: Wow! Thank you. That's incredibly humbling.
Dave: Now, I did buy three of your books and I indirectly probably sold hundreds of your books to people I recommend it to. So hopefully that balances the scorecard a little bit. You had millions of dollars in value. I made you a few thousand dollars in book sales.
Ron: Oh, thank you. I appreciate that.
Dave: So your mission statement I believe reads, "once and for all bury the billable hour and the time sheet and the professions." It sounds like you have pretty strong feeling about this. First off, is that really your mission statement?
Ron: Yeah. Although it's more, but yeah, for a long time, that was the sole purpose of VeraSage basically. And of course, that's a little bit tongue in cheek because in order to do that, you have to change your business model. And that's really the overall theme of the work that we do. So it's not just about pricing and getting rid of the time sheet. It's about changing a business model, because disruptive threats don't come from new technology. They come from new business models.
So whether it's Uber or Airbnb or Spotify, whatever, yeah, they can be driven by technology, but they're essentially new business models and that's what's really disruptive. And of course now I believe there's a new business model on the horizon, and we can talk about that later, and that's what I'm just affectionately calling value pricing 2.0. But in terms of the original mission, yeah, getting rid of the billable hour in the time sheet was it, and I can happily report, I believe, mission accomplished. We've done it. There is nobody out there defending the billable hour. As Oscar Wilde said, it's got no enemies, but it's intensely disliked by its friends. We've got some 40% now of CPA firms that have moved to value pricing. I just think it's time to move on to the next iteration, but yeah, that was the original objective.
Dave: And by the way, I do want to talk about 2.0, but I kind of want to go through a little bit of 1.0. to give the listeners some context. So you were at KPMG, you started there in 1984. And so, what brought you to this conclusion that it was time to bury the billable hour? Was it just something that happened in the first week when you had to do a time sheet or did it evolve over time?
Ron: No, actually I was a big believer in time sheets. I used to be an accountant and bookkeeper even back in high school and did tax returns, even defended people in front of the IRS at the age of 17. And I filled out a time sheet and I billed by time because that's what CPAs that I talked to told me to do. And I had the same attitude going into KPMG. What changed was when I left KPMG and started my own firm, and when you start your own firm, David, as you know, you're wearing every hat. You're HR, you're marketing and you're the janitor and everything else, but you're also the pricer.
Now, that's not something I was really involved in that much at KPMG, except to see my time being written off by its partner. And when I had to do my own pricing, I realized really, really fast that the billable hour was a lousy customer experience. And I was into total quality service and studying the greatest service companies at the time, outfits like Disney, Nordstrom, LLB, Gotech, Lexus, American Express, Southwest airlines. These were legendary customer service companies.
And I realized that the billable hour was a lousy customer experience. I said, this has got to stop. This is the wrong thing to do. The customer comes in angry or calls us angrily and says, "Hey, why didn't you tell me it was going to cost so much?" And my only response was, "Well, I spent the time." Well, what a dumb response. The customer doesn't care about the time. Nobody cares how long it took Honda to build their car. What they care about is the result and outcome. And we focus on the inputs. It's crazy. It's like when a loved one has a baby, you want to see pictures of the baby, you don't want to hear about the labor pains. And we focus on the labor pains in the billable hour. Not only do we focus on them, we bill for them in six minute contractions. And that's just insane because it takes our focus away from what the customer values, which is the outcome.
And so we just changed it. There was nobody on the circuit talking about it. There were no books on it. There was nothing. We just felt it was the right thing to do. Now, we made every mistake under the sun, and I don't want even want to recount them all, but the customers loved the certainty of a fixed price, much like most of us love the certainty of a fixed rate mortgage versus variable. And we're willing to pay a premium for that if you're premium, especially in the last 20 years as interest rates have cratered. And the customers loved it. So we stuck with it. And it was that that allowed us to upgrade our client base, set higher minimum prices, get rid of time sheets, which our team members thoroughly enjoyed. They didn't have to account for every six minutes of their day like they were in prison. It altered my life. It transformed my life. I said, "This is senior way to run a practice." And it goes against everything we're taught.
Dave: And so in like a perfect example of this, and I think I've told this story so many times, I don't know if it came from one of your books or if it just kind of be mold from that. But I think it came from one of your books that imagine if a client came to you on like a special project and they say, "Hey, what do you think it's going to cost?" And you scoped it. And you said, "Like 5,000 to 7,500," which would be roughly a $2,000 gross profit, if you're in the middle.
And then imagine if the client said, "Okay, let's do it. Can you do it for a fixed fee?" Now, when I ask most CPAs this question, "Where would you price it for a fixed fee?" They usually give the average price, between the five and the 7,500. And I tell them wrong answer. When the client wants a fixed fee, you tell them 8,000, you charge them a premium for that. I'm pretty sure even those numbers, I think came from one of your books, didn't they? Does this sound familiar?
Ron: It sounds familiar, yeah, because we always ... Because I was the worst offender, I quoted ranges all the time. That does nothing for the customer. We quote a range because it makes us feel good and it's kind of a way to wimp out, but imagine going to the grocery store and pulling down a box of cereal and see a range of prices on it. Not only would you be confused, you'd just be annoyed. And so when I used to tell people this, I used to say, well, look, if you're smart enough to come up with a range at the beginning, then just quote the high end and shut up.
And like you said, even at a premium to the high end, because you are giving a fixed price and that contains more value right there, just like a fixed rate mortgage. Yeah, I am anti range. Now, I should say there's one slight modification to that. If you come up with a range, the more strategic thing to do is to offer the customer three options. Then you change the decision framework in the customer's mind from a price decision, when you give them one price, take it or leave it, to a value decision. And that is far more strategic and better pricing.
Dave: Yep. And I use that to this day and I know you know that most of the time they picked the middle option. So I made sure that it's structured such that I'll be happy when they pick the middle one. And so just in this example we gave, and so just from kind of simplistic starting point, so that CPA that before had quoted it at five to 7,500, and let's say they really thought it was going to fall into that price. And so if it was five grand, they'd make roughly a third of that, call it $1,500. And if it was 7,500, they'd make $2,500, following the, a third, a third, a third model.
Now look what happens when you charge 8,000, the client pays 8,000. Well, let's just say that you were at the mid point between the five and the 7,000, you're at 6250. Well, on that 6250, your normal profit on that would be about two grand, except that instead of charging 6250, you charged eight grand. So now instead of making two grand, you made almost four grand and the client is happier because they're not worried about any cost over runs. Isn't that kind of the first layer of starting to understand the benefit to this idea?
Ron: Absolutely. In fact, you just articulated what pricers call the 1% windfall, which is if you increase your pricing, you can do this on a spreadsheet, just take 1% of your gross and watch the impact on your bottom line or your gross profit margin. And 1% can have a tremendous impact on the percentage change in your profit. So imagine if you could increase your pricing power by 3% or 5%. I mean, it doesn't have to be large numbers, but it makes a dramatic impact. And in fact, the pricing lever, out of all the levers you can pull in the business, whether that is efficiency gains, rainmaking, going out and getting clients, all of that type of thing, the pricing lever has got the most leveraged to impact the bottom line.
Dave: Wow! Yeah. Agreed. I was going to ask you for a case study, but I'm such the excited pupil that I would like to demonstrate to the teacher that I learned this. So, if I may, I'd like to walk you through something I did with a CPA firm about five years ago that changed their practice. And so, if you're up for it, let me walk you through what we did.
Ron: Absolutely. Awesome.
Dave: And then give me a grade. At the end I'm going to want to grade how well I implemented the principles, okay? No pressure there. So in our business, we serve a few hundred companies on the IC-Disc, and we work closely with their outside CPA firm. Basically we do that part and the CPA does everything else. And the CPA really has the relationship and we recognize that.
And so I see a lot of these firms on how they do things. And one day I was talking to one and they were complaining and I said, "Well, I think I can improve your pricing a lot." So they were like, "Sure, go ahead." So here's the deal, their typical S-corp tax return, they charged in that same five to $7,500 range that I think you talked about in the book for a hypothetical service. And I looked at it and I said, "Now, what's your biggest complaint about your clients?" And they said, "They'd never call us in advance before they do stuff. They always tell us after the fact when we can't help them." And I said, "Okay. Now, why do you think they don't call you?" "Well, I'm not sure." "I can tell you why they don't call you, because you've made it punitive. You send them a bill every time they call you."
And then I went on, I said, "Did you know, in my experience, the biggest complaints that our clients have about their CPA is there's three. One is every time they call them, they get a bill. Two, they feel like they're the ones that have to identify the good ideas rather than the CPA bringing them the tax ideas. And so they feel like they have the idea. They call the CPA and then the CPA sheets are down. And thirdly, they feel like the CPA is very reactive and there's little proactive communication." Is that consistent with your experience as far as clients are concerned?
Ron: Oh, geez! Absolutely. In fact from what I've seen, the number one complaint why clients leave CPAs is they just don't feel like they're being treated properly, which is very vague sentiment, but it's got all sorts of customer service failures wrapped up in that. Like being nickeled and dimed every time you call or meet with your accountant. That is why we put in the unlimited access. And not a Berlin wall of the customer not wanting to call you. And David, why would you not want to hear from your customers? It's crazy. We're counting the pennies and we're leaving hundred dollar bills laying all over the ground because we want to charge for every minute. And yet if they call you before they do something, that's the point that we can add the most value. It's after they do something that we can't do a whole lot and the value deteriorates rapidly.
Dave: Oh, I know. I was talking to the CPA firm and I said, "I tell you what," I said, "I bet you that if you spend a little time with me, I can coach you on this. And if you change your service from being 5,000 to 7,500 range on an hourly basis, if you charge a flat $25,000 fee, the client will love the service way more, and you'll make five times more money." And they said, "That is impossible. That is impossible." So I walked them through it all. They still didn't believe me. I asked them, I said, "Just test it on three clients. Just tell him you have a new option and see what they think." And all three of them jumped at it.
So, here's what it was composed of. So the first thing we did and this one I think I actually learned from strategic coach not from you. We came up with a unique name for the service to help de-commoditize it. And I forget what the exact name, but it was something like the comprehensive entrepreneurial tax solution or entrepreneurs tax solution. So it was a fixed fee. And so the first thing was unlimited questions. Obviously I got that from you. And I talked to the CPA. I said, "Your clients are busy. Are they just going to call you up to just talk about the weather?" And they're like, "No." And I said, "Okay. So first of all, here's how we're going to get to 25 grand. We're going to first take that 5,000 to $7,500 range, add $500 to make an $8,000 fixed fee. So now, we're at eight."
And then we add, for the unlimited questions, why don't we say that's worth like three or $4,000. Because you have to realize that I had to work from the bottom up on the pricing. And they said, "Okay." And I said, "What's the expected cost? How many hours you think your clients are really going to call you?" And they're like, "Maybe a couple of hours a year." I'm like, "Okay. And your hourly rates, what? Like 350 an hour?" Like, "Yup." "So it's costing you $700 from a time perspective, but that you're building in 4,000 in fees, is that not a better deal?"
Ron: Sure.
Dave: And then I said, and I know this is right out of your book. I said, "What do you do when clients are not happy with your service? Like you were late, you're screwed up something. What do you do?" And what do they do, Ron?
Ron: They write down or write off.
Dave: And why did they do it? Because they have a implicit satisfaction guarantee, right? But it's not explicit. It's not explicit though. So, following Ron Baker's theory, we make it explicit, make it unconditional a hundred percent satisfaction guarantee. And let's add, I forget what we added for that, three or $4,000,
Ron: What they now call a value guarantee, by the way.
Dave: You know what? I'm going to jot that down. And then I said, okay. I said, the next thing we're going to do is this fee is going to include audit defense. So if their return gets audited, you defend it, no extra fees and extra costs. And they freaked out on this one, Ron, as you would imagine, because CPAs are so risk averse. But then we talked through it and I'm like, "What percentage of your client's returns get audited? How much of your time does it take?" And we came up with an expected cost of like 500 to a thousand dollars. And that's their billable rate, not their true cost. And I'm like, "And I bet you, so let's add like $4,000 for that." "Okay."
And I said, "And then my next thing is you're going to meet with your clients every quarter. "Every quarter?" "Yep. You're going to have an hourly meeting every quarter. And then the end of the year in November, you'll have an annual planning meeting like for two hours." And they're like, "Wow! That's going to be like 10 hours at a time." And I'm like, "Yup." "And we're going to charge like five grand for this, 10 hours at a time." I go, "Okay. That's all right." Anyway, when it was all said and done, they came up with a service that was fixed fee, unlimited questions, five visits a year, unconditional satisfaction fee, audit defense included, all that for just a flat 25 grand. And that's what they went and pitched to the three clients, all three said, "Yes. What took you so long?" So, I'm anxiously awaiting, what's my score there? How well did I capture value pricing 1.0?
Ron: Wow! Wow! I mean, that's an eight plus, David. That's perfect. I mean, you captured everything. You even added something. I just want to point this out because you're right. This did not come from my book. I've learned this since, how important it is to name a service. So, I'll grill you. I'll ask you a question. What is the most profitable professional service ever?
Dave: Most profitable professional service ever?
Ron: It's got a name and I'm not talking about the generic name, like an audit or tax return. I'm talking about an actual name like you did with these guys.
Dave: I give up.
Ron: You know it. As soon as I say it, you're going know.
Dave: Guaranteed delivery in 30 minutes?
Ron: Well, that's a great guess, except that's not professional service. If I told you the name of the firm, you might get it, Wachtell Lipton.
Dave: You know, I'm still drawing a blank.
Ron: The poison pill.
Dave: Oh, yes. Yes. Yes.
Ron: Now, I've talked to many lawyers who tell me the strategies developed in the poison pill are not that difficult. Because they branded it and named it and marketed it. It's just like buying the box of tide. We don't buy a product to do everything. We buy a product to do something and something really well, hopefully. And that's how the poison pill was perceived. So, absolutely brilliant to name your packages. So I love that.
I also love how you made them visit or have meetings with their customers five times, because one of the biggest problems I think professional firms have, all professional firms have, this ad agencies, CPAs, lawyers is this, they have too many customers. And because they have too many customers, they can't do those in-depth meetings. They jump from one thing to another. They're too frenetic. They can't go deep with any one customer and help them strategize and add more value throughout the year because they don't have enough contact with them.
And I think that's an under service that we do. We do a disservice to our customers when we have too much capacity. Imagine you have a dentist and you have toothache, and you call your dentist at the end of the day, 6:00 PM or something. And he says, "Well, Ron, I can't fit you in for another two weeks." How are you going to feel about that? No, you expect that dentist to have capacity in his practice to handle emergencies. And if they don't, that dentist is a lot less valuable to you than a dentist that does have capacity.
Dave: Yep. And the other book I read about the same time I read value-based pricing was Richard Koch's book, The 80/20 Principle. And he has an exercise where you list your clients in descending order by revenue. And then you calculate what percentage of that revenue they account for. And then you do a cumulative. So like the number one clients, like 7% and number two is 6%. So combined, it's 13. And you realize that you don't have to go very far, like four or five clients, like account for 20, 30% of your revenue and probably 50% of your profits, because they're the most profitable clients. Yeah. So I digress on that.
Ron: No, no. And that's very true. And by the way, you've probably had the same experience, but we run that analysis across all professional firms in this universe. It's a universal loss like gravity. It's unbelievable that 10% of your clients probably are generating, I would say, maybe even 150% of your profits.
Dave: Right. Yeah. And those are the clients who pay their bills timely. They're the most enjoyable to work with, staff love working with them.
Ron: They buy more from you.
Dave: They buy more from you. But because they don't complain, you don't give them any attention. You spend all your time on those C clients who complain all the time. Obviously that's not-
Ron: Absolutely. We're in the back of the plane serving the little lady who keeps it in the call button peanuts, and yet we're ignoring our first class passengers. And that doesn't make any sense whatsoever. You should pamper the people in front of the cabin, not the back of the cabin.
Dave: I know. Do you mind telling the airplane example, as far as if you bought an airline ticket like you bought professional services? Do you know what I'm talking about? And if you don't, I'll tell it, because I know it so well, but I'd rather you tell it.
Ron: That's a great story, isn't it? You go to the counter and they try and charge you four bucks a minute to buy the plane. Well, how long is it going to take? Well, that depends on cargo weight and passenger weight and wind. Imagine how you'd feel as a passenger? You obviously walk to another airline counter.
There's a better story about this and it was done by a comedian who's also a CPA MBA's. He's a fellow at VeraSage. He's our standup comedian. He literally is a standup comedian, great guy. His name is Greg Kyte. If you go to gregkyte.com, he's got a video up there called Bob's barbecue. And this guy goes into this fast food kind of joint and orders a pulled pork sandwiches. "So how much is that going to be?" He says, "Well, it's a dollar a minute." And it was actually a commercial done for an IT firm that ran it on TV and just got incredible response from it. Go check out Greg Kyte, that's K-Y-T-E.com. Bob's barbecue or just google Bob's barbecue, Greg Kyte. You will start showing that video to everybody because it's absolutely hysterical. It's better than the airline story.
Dave: I love it. Well, the airline story, I believe you forgot part of the story. The other part of the story is that you have to explain to the client, well it's $4 a minute and it just depends on how long it takes to get there. And actually, I think it goes, "Well, it's anywhere from four to $6 a minute." "Well, what determines that?" "Well, determines the seniority of the pilot, because some of our pilots are more senior and we have to pay them more money." "Do I get to pick the pilot?" "No, no." "Well, how do I know?" "Don't worry. We'll send you a bill in 30 days, and you'll just pay for it then." The pilot seniority part. Let's see, what do we want to talk about next? So I got the initial eight plus, but then I failed the poison pills, so I guess that puts me at like an A- for the whole class.
Ron: No, no, you nailed all the things that ... Everything that you laid out there, the unlimited access, the audit representation, the meetings, all of those things are, think about it, the marginal cost to the firm of doing those things ... By the way, I would argue the marginal cost of those things is zero.
But the other thing is, but the value perception in the minds of the customer increase five, 10, 15, 20 fold. What it illustrates better than anything is, we can increase the perception of value in the minds of the customer really without adding costs. I mean, think of Apple, when they paint various products, gold or red or whatever, we like color as human beings, we'll pay more for color. To paint a pager or a phone black or gold doesn't cost anymore, but we see as higher value, and we professionals don't understand that.
Dave: Yep. I would agree. So when did you publish your first book? Was that the Professional's Guide to Value Based Pricing?
Ron: Yes. Once we implemented a value pricing in my firm, I think it was around 1988 that we really started to experiment with it. Like I said, we made every mistake under the sun, but once we smoothed it out and started doing it better, I started teaching it to my colleagues at CPA societies around the country. And that was in 1994. I've always known I wanted to write a book and finally had landed on the topic. So I started researching it more. And that's what got me kind of into the marketing side and the price theory side, the economic side of all this.
Because if you recall, I got into this from the customer experience standpoint. I got into it for a totally weird reason. I just wanted it to be a differentiated customer experience like Disney or Nordstrom. Why are these companies so great? Why do we talk about them all the time? Because they offer just a different level of service. That's what I wanted to be in my firm. And that's what brought me to value pricing.
I published the book in, I think it came out in July of 1998 and it was published by Harcourt Brace. And oddly enough, these two guys from Australia that used to run accountants bootcamp, Results Accountants was the company and they did a bootcamp and they did this thing around the world and they even brought it to the U.S., Australia and New Zealand and Europe. And they started waving my book around on stage everywhere they went. And they did a lot of public programs and the book just took off. So it went through six editions and it sold 40,000 copies over that time period. That was my first book. And it was interesting because it was $150 book.
Dave: That is awesome. And then when did you step away from your practice?
Ron: You talk about life's regrets, that's one that I have. The Kiwis have this great thing that you can't sit between two bar stools. I knew I wanted to write and I knew I wanted to teach and speak, do public speaking and just proselytize what I had done in my practice. I wanted to share it with my colleagues and anybody else who's out there billing by the hour. And yet I was too paranoid to burn the ships and really commit. So I tried to sit on those two stools, and that's a really bad move. And I did that probably a year or two too long, wish I would've found out sooner, but I sold around 2000. I sold my practice to my partner who still operates it. And I started VeraSage and I've been doing this full time ever since.
Dave: Okay. That takes us to that. So you kept writing books. Tell me, I was listening to one of your podcasts, and I think it's sponsored by Sage software.
Ron: Correct. Because my co-host, Ed Kless, works for Sage.
Dave: Oh, okay. Okay. Well that explains. But that's not related to VeraSage, is it? There's no connection?
Ron: Other than the name, nope, nope, nope. Sage is the software company that sells accounting and other types of software to businesses.
Dave: If a CPA firm wants to implement some of these ideas, these value based pricing ideas, where would you suggest they start? Should they start with one of your books? What do you think?
Ron: Luckily, there's a lot more out there now than there has ever been. I'm actually quite proud of this and this is not to brag, because this is an accomplishment of not just me, but VeraSage, which is 20 some odd fellows spread out around the world who live and breathe this stuff, just like I do. VeraSage has spawned more pricing consultants to the profession than anybody. We have influenced so many people now that teach pricing. And so there are tons of resources available in so many books, if you go to Amazon and search for value pricing for professionals, you'll get lots of books, not just mine, which is great. I did this because I wanted my ideas out there and I wanted them to be adopted.
I didn't want to try and hoard anything. I wanted firms to use these things, like you have, with that great case study that you shared. So I would start with, if you wanted to start with one of my books, my latest, which is the Implementing Value Pricing, which I think came out in 2011 would be the one I'd go to, but you could also go to The Soul of Enterprise and search the archive page. And there's tons of shows that we have done with pricing professionals and profiling firms, there's value price, the various aspects of value pricing, the value guarantee, project management, and we've done all these different shows. There's a wealth of information to help a firm that's really motivated to make this change.
Dave: Okay. I'm glad to know. I don't know if I have read Implementing Value Pricing because I think my entree being a few years before that, I think my focus was on what I called the big three, the value based pricing, the firm of the future and pricing on purpose.
Ron: Right. My colleague, Ed Kless, who I do the radio show with, I think this is on the blurb to Implementing Value Pricing. He says professional's guide to value pricing was the old testament, this is the new testament. It was kind of everything I've learned in between publishing that first book and this book. Of course what I learned was we talked more about intellectual capital and KPIs and offering three options for instance which I didn't talk much about in Professional's Guide, talk somewhat, but got into more of the behavioral economics of offering choices and how that influences our decision-making as customers. Because it's fascinating, did you ever notice every business offers you three choices? Even carwash establishment.
Dave: Right. Right.
Ron: And we never did that as professional firms. And for a long time, I wasn't a proponent of it, until I started studying the literature and said, "This makes so much sense." So I changed my mind on that, between those two books.
Dave: Okay. Let's shift gears and talk about some of the misconceptions. I'm sure that over the last twenty-five years, you never had a professional say, "Well, this won't work in my purpose." What are some of the biggest objections you've heard that maybe seem to you like the craziest?
Ron: Favorite software on VeraSage.com, which is the Think Tank things website. There is a blog post called Objections to Value Pricing. I forget the exact title, but it's something like that. We tried to keep a running list of the objections we heard. We facetiously somewhere offered people, we said, "If you give us an objection we've never heard, we'll give you a million dollars." And somebody said, "Well, the Lord doesn't want me to value price." We weren't sure what to do with that, that one I hadn't heard. Everything.
"Well, that's easy for the big firms, but we're a small firm." And then you go to the big firms and they'll say, "Well, that's easy for a small firm, but we're a big firm." Well, that's easy for you. You're West of the Mississippi, we're East of the Mississippi. That's easy for you, your partners drive Lexuses, our drive Infinities. I mean, we heard everything, you name it. Our customers are different. We live in a small town. Our customers are farmers. Every one of these was not only self-contradictory, but it just made no sense. Well, I practice in a small town. Well, when you go to your Mercedes dealership in the small town, is your Mercedes 40% cheaper? Just curious.
Dave: Oh, that is great. That is great.
Ron: So I think I've heard every objection, but yeah. And like you said, CPAs and professionals in general, not only are they risk adverse, they're loss adverse. And I think it's more frightening to them that the prospect of losing, "What if it takes us two hours longer than we thought?" Stop it. It doesn't matter. It's not costing you anything to spend an extra two hours with your customer. There's no cost. You don't pay it like you're buying paperclips at Staples. Your customers don't have costs. Your firm has costs, but your customers don't. And so we just need to get over that mindset.
Dave: Yep. I would agree. Now I'm anxious to get to value based pricing or value pricing 2.0. So let's talk about that and tell me what brought this on and what lessons you've learned and what are best practices of 2.0?
Ron: Yeah. Great questions. What brought this on was simply doing what Peter Drucker as you know from reading me, I quote him all the time. He's one of my heroes. He had this uncanny ability to look out and see the future 50 years before anybody else. He didn't consider himself a futurist. They asked him about this and he said, "No, I'm not a futurist. Those people are charlatans." He says, "I just look out the window. And that's where this comes from." We are living, I think, in a tsunami. And that tsunami is the subscription business model. And we're seeing more and more companies, most of the unicorns out there are based on subscription model. Of course we saw software move to software as a service, but now you can subscribe to all sorts of things.
It's like drinking from a fire hose, I can't even keep up with what we can subscribe to. We can subscribe to a boat from Brunswick. We can subscribe to Porsche. We can subscribe to Teslas and all sorts of things. A home with Rome, I think it is, can live like 40 different locations or something around the world on a subscription basis. And I think this model makes total sense because if you think about it, professional started with hourly billing. It was actually started in law firms for as long before CPA firms. Which prices the inputs, we're going to spend five hours or 300 bucks an hour. So that's pricing inputs.
And then in-between hourly billing and what I'm just affectionately calling value pricing 1.0, we started fixed fees. We said, "Well, okay, we estimate this will take about six hours. So we'll just fix that price." That was kind of a hybrid. And then we got into value pricing 1.0, which is what my books and work has been all about, which taught people, you need to price the customer. Stop pricing products and services because value is subjective. You need to price of the customer.
And now with value pricing 2.0, which is the subscription model, you need to price the relationship and the portfolio. And both those are really important. The first reaction to that statement is, well, wait a minute, what's the difference between the customer and the relationship? That sounds like semantics. The thing is, it's not. It's a huge difference. And let me give you an example, Porsche right now has a program called Porsche Drive. I believe it's in six cities in the U.S. and Toronto. And it's got three tiers. They've added a tier to it where you can just rent or subscribe to a single porch. But the other two tiers are like 2,500, 3,500 bucks a month. And you get to choose between a fleet like six or seven different models of Porsche.
And so I can have a Boxster during the week, Convertible, whatever. And then I can say on the weekend, "Hey, I got friends coming by. They want to go wine tasting. I need an SUV." And they'll white glove out an SUV, pick up my Boxster and take it away. That 3,500 bucks a month covers everything. It covers everything except gas and tolls. They pay insurance, they pay maintenance, everything. People say to me, well, what's the difference between that and buying it or leasing it? First off, there's no mileage restriction. There's no limit on how many times you can switch out a car. You could literally switch out daily if you want it to.
And the other thing is, it's not tied to a car. You are subscribing to Porsche. That is a different relationship with that business. This is very difficult to articulate, because it's a psychological. This is a behavioral architecture issue. This is an architectural framework, but when you subscribe to a company that is a different relationship than just entering into transactions with them. You're more committed. You buy more. Amazon Prime is a great example. Prime members spend something like six to eight times more than the average Amazon customer, because they subscribe. It's not just because they get free shipping, it's because they have a relationship with Amazon. And so we-
Dave: I was just going to say, if you think about Porsche, if they're just selling a car on a three-year lease, let's say, in three years, they have to resell that customer. Whereas on the subscription, I mean, I could imagine, my wife's a Porsche enthusiast. I can imagine that basically you sign up once and your transportation needs are done for the rest of your life, because you're going to drive a Porsche for the rest of your life anyway.
Ron: What are you going to drive the rest of your life? You're going to drive a Porsche, for as long as you drive. Here's the other nuclear bomb, because Porsche has kind of got the same problem that Harley Davidson and other of these aging demographics. Their customers are dying up literally. So they've been trying to go after a younger demographic and even Parley is going after women. And here's the thing with Porsche drive, 80% of the people who have signed up for it so far, are new to the brand.
Dave: Oh, wow!
Ron: So what would they be driving for the rest of their lives? This shifts the mind. And what I mean by the relationship is, stop thinking about the math of the moment and look at the long-term value of that relationship. Invest in that relationship. Continuously delight your customer, because I think, and we've had on the guy named Tien Tzuo, who is the CEO and founder of Zuora, which is a software company built to run subscription-based businesses.
So this guy, he's got all the major leading subscription-based businesses as his customer. So he's got a lot of data to crunch and to analyze. And he wrote a great book called Subscribed, and I highly recommend that book, just like we highly recommend John Warrillow's book, The Automatic Customer, another fantastic book on subscription. And Tien says, in five years, you won't own anything, you'll subscribe to everything. Now, I don't believe that David, but I do believe in five years, you'll have the option to subscribe to everything. And every business will have to deal with that, irrespective of whether or not they offer a subscription.
That was way too long of a setup, I apologize, but here's the gist of it. What is the model with subscription for professional firms? We already have one. And it dates back to 1996, and it was the Seattle Sonics team doctor. And when one of his players got injured, he would be able to go out on the court, tend to him, knew exactly what to do for them to get them healthy or get them back in the game. And he said to himself, "Why can't I do this in my practice? I know these players so well. I know everything about them, their diet, their health issues, everything. I know their history, their family history. Why can't I do this in my practice?" He said, "I've got too many patients in my practice." And so he started MD Squared, which was the first concierge medical practice. That is my model of the future.
And that's where the second part of the pricing the relationship just like Porsche does, and now you also price the portfolio. This kind of goes back to your audit insurance example. Once you put a price on the portfolio, you know some of your customers are going to utilize you more than others. Some patients are going to get more sick every year. Some are just going to need their annual physical, but they will pay for that peace of mind and that convenience of being able to access a doctor when and where they need it. I mean, these concierge doctors do house calls. They do office visits. They'll go to you. Some will even travel with you. They were doing telemedicine long before COVID. You can text them, same day appointments.
People will pay for that type of convenience and peace of mind. And it's amazing because here's the thing. I believe concierge doctor is there to keep us healthy. To keep us physically healthy. Well, what's a CPA therefore? To keep us financially healthy. So the parallels are uncanny between these two models. And I believe that's the model of the future. And just like in medicine, you ask a doctor why they got into medicine, they'll say well to help people, but what are they spending their time doing if they're a general physician? They have a panel of 3000 patients. They're spending about five minutes each, seeing about 30 of them a day, spending half of that five minutes, by the way, in front of a computer screen more than doctors and so they become a better typist than doctors because of the electronic health records, which they despise.
And the concierge doctors and the direct primary care doctors, which is kind of the lower cost cousin to concierge medicine. These practices are thriving. They're booming. There's 14,000 of them and growing across the country. They're in every state, I believe now, maybe not in North Dakota. There's one state they weren't in for a while, but I think they're there now, but that's the model. You take the top 20% of your patients, put them in a concierge practice, and the CPA firm says to them, and you could still offer levels, you could still offer tiers. And you say to them, "Look, whatever you need, you're covered. You're covered. You're covered for what we're capable of doing under this roof."
Now, if they need a specialist, just like if I had cancer, I need an oncologist, that would be extra, your insurance might kick in at that point, because none of these concierge docs take insurance. But for the CPA firm, if they got the get audited, they're covered. If they need advisory, they're covered. If they're doing an M&A deal, they're covered. Assuming they're under the right tier, so you move from this out of scope mindset that we talked about in VP 1.0 to a covered, non-covered. And if they want to be covered, they could just upgrade their subscription at any time. And then they can go back to the lower tier at any time.
You make it really easy for them to move around your tiers and you make it very easy for them to cancel, which again is very counterintuitive. People worry about it. "Well, what if we do all this work and then they cancel?" Shut up. That is a long term relationship. They're not going to cancel if you delight them. They're going to be thrilled just like in your example, to pay five times more, seven times more, 10 times more, and you will get annual recurring revenue and no longer will your practice just be worth one times revenue, it'll be worth five to 12 times. John Warrillow is a great source for proving that. I asked him that on our show directly, if he's got empirical evidence that professional firms sell for more than one times revenue, if they're under a subscription model? And he said, absolutely.
Dave: Yeah. He's had, I think 60,000 companies go through their questionnaire. He was actually a guest on my podcast.
Ron: I know. I listened to it. It was great. I love the guy and his book, Automatic Customer, is phenomenal. So if anybody's interested in this whole subscription, there's two essential read books, which is John's and Tien Tzuo's Subscribed.
Dave: How is Tzuo spelled? Z-H-O?
Ron: He's Taiwanese, I believe. It's T-Z-U-O. And his company is Zuora, which is Z-U-O-R-A. And he also publishes by the way, a weekly newsletter, comes out every Saturday. And it's phenomenal. I'll just give you one example. Again, this is like drinking from a fire hose. We can't keep up with what's going on in with this business model, because there's so many different. The only thing I can equate it to historically it's like the gold rush or a Renaissance period with subscription, but I'll just give you one example.
Fender makes guitars. And Fender CEO figured it out quite a while ago actually, long before COVID that people buy a guitar not to own a guitar, but to play it. If they can't learn how to play it and get continuously better, what's going to happen is they're going to get frustrated and the guitar is going to go into the bed or in the closet, maybe even be given away to somebody else, which takes another sale away from Fender. And he said, "We have to change our mindset to helping people learn to play the guitar well and to continuously up their game, because then they'll buy more complex and more quality guitars from us."
So he started Fender, I think it's called Digital Play or Fender Play, I can't remember, but it's basically an online library of guitar experts teaching you how to play the guitar at all levels. I'm sure they have basic, intermediate and advanced and probably even beyond advanced. And COVID hit, and all these people were locked down with all sorts of probably time on their hands. And he said, "We're going to give people a free trial." I think he opened it up for three or six months for a free trial of Fender Digital, unlimited.
First month he got like a hundred thousand people. Crashed the website. Second month he got up to 600,000. By the third month he had a million customers signed in to this Digital Play. Now, I'm not saying all million are going to buy a Fender guitar, but what percentage will? Here's the thing. The insight there, the lesson, at least the lesson I take away is, I don't think professional firms understand what the real value is of their relationship that they have with their customers. We focus on the products. We focus on the outputs that we do, the tax return, the audit, whatever, but what is the value of the relationship? What is the CPA firms equivalent of learning to play the guitar? Because Fender is not in selling guitar business. Sure, they make them, they sell them. But it's really about helping the customer play the guitar.
Well, I think it's helping the customer stay financially healthy, just like a concierge doctor. And that's ongoing, it's continuous, it's iterative. Their goals and objectives change over the course of their life. And that's what we should be focused on. And we should do it with a subscription model because I think, and here's a criticism of VP 1.0, we pay lip service to the relationship. Every CPA firm and law firm out there says, "Oh, we have great relationships with our clients." Yeah, but your business model doesn't reflect that. Fender's does. Because now they have an invested interest in keeping you a great guitar player. And that's what we need to do. I think that's why the future of the professions is the subscription business model.
Dave: That is awesome. So two things, one on the Fender, it reminds me of the example of people don't want a drill, they want a hole. And it's kind of like the same with the guitar, they really don't want a guitar, what they really want is to walk into some clubs some night with all their friends and to have an announcement go out, "Hey, our guitarist just got sick. Is there anybody in here that can happen to play a Fender Stratocaster strata?" What's their bridge electric guitar. "Is there anybody here can play that?" And he can just stroll right up on stage and just start jamming to the amazement of all of his friends. That's really what they want. They want to be able to play a guitar.
Ron: Yep. That's it. And you know what? That mindset from we sell great guitars to we help customers succeed in learning to play it is, I don't think that type of insight comes unless you have a subscription because the difference between a subscription model and even value pricing 1.0 or certainly hourly billing is, the customer is at the center of the relationship. We just do whatever it takes. If you're covering the customer for anything that comes up, well, then you're going to draw on all your firm's resources to please that customer if they get audited, if they need some type of specialist in estate planning or whatever it is, that your firm's capable of doing.
And the other thing is, not only just to put the relationship at the center of the business, it bakes in innovation. Because if you look at these concierge doctors and they say to you, "David, we'll cover you and your family for anything medically that you need." And usually a GP can cover 80% of your medical needs. That's about the statistic that they can cover. And what they can do under their roof to cover you is continuously expanding. Some of them have added MRI and diagnostic equipment. Some have added blood lab and other types of diagnostic services. Some have added nutritionists and other types of medicine like holistic medicine or homeopathy or whatever. And some have added drugs, some have pharmacology licenses.
This is why we subscribe to Netflix, because every time they come out with new content, they don't up the price. They're constantly delighting the customer. I think firms are capable of doing that because customers are willing to pay for that convenience, that front of the line service and that peace of mind, knowing that if they need a doctor, just like the dentist who can take you because they have spare capacity, that they're willing to pay a nice premium for that.
I've always been fascinated with the insurance model, because if you think about insurance, it's the wackiest product that we bought because we buy it and we're thrilled when we don't use it. I don't sit around and complain at the end of the year that, you know what, I didn't trigger my life insurance policy this year, damn it. Nobody says that. And that's kind of what we're tapping into, which is where the pricing the portfolio comes from, because you're spreading that risk amongst all your customer. Some are going to use you more. Sure. Some people are going to have traumatic things happen. You know what? They're covered. Stop worrying about it, they're covered.
Dave: Well, and the firm can just look at their portfolio each year like an insurance company, and just say, you know what? We have this thing priced a little too low, based on the utilization, we're going to have to raise the pricing. And they only have to change the price once, and it automatically changes, either the people are in or they're out. As we're nearing the end here, two things. One is, do you have an example of a CPA firm who's doing the subscription model?
Ron: This is so new in the CPA world. There's lots of law firms, believe it or not, that have moved into this space. There's actually an ABA article out there. And I think it's about a year old now, or two years old, that profiles something like 15 small firms. Some of them are small, sole props, two person firm. We've had a few on our show. A guy named John Tobin and Matthew Burgess who have law firms and are subscription-based.
There is one CPA firm that I know of, probably the best example. I'm not saying he's the only one with subscription, I'm sure he's not. Some CPA firms offer subscription, but only in various services like client accounting services or CFO type services. This CPA, his name is Jody Grunden and the firm is Summit CPA. I believe it's in Indianapolis. We interviewed him on our show. He went from $600,000 in 2004 when he was billing by the hour, I think. And now today he's a $7 million firm, and he does it on subscription.
Dave: So his revenues went up 12 fold, I bet you his profits went up a lot more than 12 fold down, don't you think?
Ron: Yeah, I bet they did. He does CFO services, so like virtual CFO services. I think he's written a book on it. It's a weekly subscription, which I found that cadence really interesting. Most subscriptions are monthly, but she gets his payments weekly. His is kind of a hybrid. It's not what I'm talking about. It's not as pure as what I'm talking about with like the concierge model, but it's close. He's got addons. He's got hour cart things. For me, it's two scope of work. I view the world now covered and non-covered. And if you want to be covered, just slide up to the tier that covers you and then slide back. But he doesn't do it that way, but that's okay. We're going to see a lot of experimentation. I don't have all the answers for this model, but I know it's the future.
Dave: Wow! I just had never really thought about that. I'll be honest, I've still been in valued pricing 1.0. You might've just added another million dollars in value to me over the next 10 years. So thank you.
Ron: Well, that's why when you asked me about the VeraSage mission, I actually think and have been thinking that I need to shut down VeraSage because we're just so tied to VP 1.0, that we need to reinvent ourselves and move over to 2.0. And not everybody's ready for it, David. It scares some people, even though people can relate to subscriptions because they probably have 20 things they subscribed to in their lives. And if you talk to business owners, they probably even have more than 20 things they subscribe to, the software. I just read an article today, you can now subscribe to a freelance worker with Fiverr. That's what? $2. That's brilliant because would you rather be in a transactional relationship with your customer or would you rather be in a long-term relationship like Porsche or Fender?
Dave: Yeah, that is awesome. Maybe a food for thought, may be VeraSage, it's time for them to graduate. Maybe VeraSage has accomplished its goal.
Ron: That is what I've been thinking. Hopefully, you would think once objective or mission accomplished, you would shut down and move on to the next thing. I'm kind of ready to do that mentally. I've already moved on. It's very hard for me now to talk about VP 1.0, when I know there's something far superior to it. And people ask me, "Well, wait a minute, you're blowing up your life's work." No, I'm not. This is the beauty of commerce. This is the beauty of markets. We constantly innovate new business models. There's nothing new about this, it's just a new business model. Now, albeit this business model does have some baggage, right? Remember the Columbia House, one penny, and you get five CDs or five albums, if I really want to date myself or 10 albums, and you could never get out of it.
Dave: Like the Eagles. Like Hotel California.
Ron: Exactly. Hotel California business model. But here's the thing with that, the subscription companies now that have grown up, they are so easy to cancel. Every communication you get from them, their website, there's a big fat cancel button, because counter-intuitively enough as you make it easier for them to cancel, customers know they can get out anytime. They're less likely to. Now, you've got to delight them. You've got to exceed their expectations, but you know what? You got to do that anyway.
Dave: Yeah. And I wonder if John Warlow would say that part of the reason you want that cancel button is if you ever want to sell your business. Because the biggest objection your buyer's going to have is, how loyal is this clientele? And if you can say, look, we have this prominent cancel button, all the ones who wanted to cancel, have already canceled. So you're not really taking-
Ron: Right. I think he will totally agree with that.
Dave: That might help your multiple. So go ahead, the other interesting thing.
Ron: I think it would. The other really interesting thing about it is when you look at the traditional income statement of any business and then you look at a subscription P&L, it's totally different because the subscription P&L is forward directed. It starts with annual recurring revenue. It backs out churn, which is the customers that you lose in terms of revenue. And then it's got all your other things like cost of goods and marketing and all of that. So you can figure out cost to acquire a customer, but then it ends with annual recurring revenue going forward. So everything about it is future directed. When you look at that income statement, there's no room for realization per hour. That's meaningless.
Because when you change a business model, two things always change. One, your pricing strategy changes. So we go from buying $20 CDs to a buck a song on iTunes. And now we're streaming music on Spotify or Apple or whatever. And the second thing that changes is the business's internal metrics, their internal KPIs or dashboard that they look at. I assure you that Uber is not looking at the same metrics that taxi cab companies look at.
One of the problems with value pricing is we've held onto the old measurements, realization, utilization, the hourly rate, all that BS, and it's meaningless if you're value pricing. Well, it's even more meaningless if you're in a subscription economy because everything changes. And just one more interesting anecdote on that, if you read the book, No Rules Rules by Reed Hastings, who was the founder of Netflix, here's something, and I learned this from the book, I did not know this. I knew that Netflix had different metrics that they looked at. But I did not know that Netflix does not have individual KPIs for their employees.
Dave: Oh, really?
Ron: Yeah. You know what? You're a professional. Do the work. And we're not going to micromanage you and we're not going to set up all these 63 different measures that you can gain or quite frankly ignore, if you have too many metrics.
Dave: And a whole management layer. You can just skip the whole management layer, monitoring all those individual KPIs.
Ron: Exactly. That's it.
Dave: Now part of the challenge, I think, is the traditional accounting statements I think are so obsolete or archaic. Like for example, the balance sheet, it doesn't show anywhere on there, the value of the customers.
Ron: Nor does the income statements.
Dave: I know. But it seems like that the subscription model, it seems like a better, clues you in maybe to the value of the customer because you can-
Ron: It shows you what you're gaining. One of the problems with gap is it combines all of our revenue. It jumbles them all in. It takes the bad customers and the good customers, and it's just called the revenue, so they all look equal. Now, the subscription economy to be fair, kind of does the same thing, but under subscription, at least the way I envision it, you wouldn't price the customer anymore, you would actually have three listed prices for three levels, maybe four, you had a fourth option. Like an American Express black card where you really pamper the customer with a white glove, everything. And then all your customers are good. You don't have any back of the plane customers because you're plane only holds front of the front of the plane customers.
Dave: Oh, I completely agree. And one of the things we've done with our three pricing options is I've intentionally priced them such that I'm completely neutral on which one they take. I mean, we're not trying to upgrade them. The entry-level one we've priced it such that it's just as attractive if they're in that, because that entry one, we don't have maybe as much time requirement or investment or whatever. So that's still a great client for us. And conversely, the client that pays us the most is not necessarily a better client for us because we're having to do a lot more.
So that to me is the other piece. Because I think a lot of people it's like, they try to skew it. They're like, "We'll try to trick them into getting the entry-level program, and then we'll try to upsell them later." To me, that's not the way to go. Well, Ron, you now have set the record for the longest podcast episode of all of my podcasts. So yeah, you're number one. So let's wrap up, if people want to reach out to you or they're interested in learning more, where should they go?
Ron: They can go to VeraSage.com, which is the think tank, has got lots of resources and lots of interesting blog posts.
Dave: That's V-E-R-A-S-A-G-E?
Ron: Correct.
Dave: Okay.
Ron: And it's also got trailblazer case studies where firms submit their own case studies on how they made the transition. You can also check out my radio show, which I do with Ed Kless, which is the soulofenterprise.com. That's our page. And you can see all 325 plus shows that we've done for the last six and a half years or so. We've talked about all these topics and more. We've done a lot on subscription. We've had Tien on, we've had John Warlow on, we've had Robbie Kellman Baxter on, who's another expert in subscription and Ann Jan is another author on subscription. And we've been talking about it. We've done separate shows on nothing but subscription and the concierge practice.
Another thing that people might find interesting is listening to the shows with Dr. Paul Thomas, who is a direct primary care physician out of Detroit, Michigan. And he started out in his DPC practice. He didn't convert like an existing GP practice. He started out right out of residency. What's fascinating about him is he's like 99 bucks a month, because the area in Michigan he's in got average lower income than the rest of the state. And so he serves basically an underserved population. So his price points are lower as they tend to be, but this guy's flourishing. And he limits himself to 600 patients. Since we talked to him the first time, he's added two more doctors and he's added a separate location. His practice is flourishing.
And he provides unbelievable care to his patients. I mean, there's pictures of him visiting their homes. Just a great guy. He's just a terrific guy. And he's young too. I don't even know if he's 30. He's just a great guy. Dr. Paul Thomas, you can ... And I think we've interviewed him three times and he actually wrote a book on creating a DPC, which if you're really interested in going down this concierge medicine model like I'm talking about, I highly recommend that book because I think that the similarities between what a physician does and what we do as CPAs is incredible. There's tons of parallels. You can learn a ton from him. And I believe that's true for lawyers too, by the way.
Dave: What's does DPC stand for?
Ron: Direct primary care?
Dave: Oh, I see. Okay.
Ron: So that's a doctor that does not take insurance, that doesn't have to have any of that layer of bureaucracy to deal with billing and coding and all that crap. Doesn't have to do electronic health records. They avoid all that bureaucracy because they're here to help the patient. That's why they got into medicine and this lets them do that and flourish. And he's a great example of that. He's like one of my favorite people. He's fantastic.
Dave: Well, that is awesome. Well, Ron, thank you so much for your time. This was just a blast.
Ron: David, two more things. People can find me on LinkedIn. I'm one of the influencer bloggers. So I have over a hundred posts up there on all these topics and more. They can also find me at Twitter at Ronald Baker. And if they want to email me, send me an email to ron@VeraSage.com.
Dave: That is awesome. Well, thank you again, especially our CPAs in public accounting that are listening to this, I would encourage you to really, if you've not already gotten ... I guess there's a quick question. If they haven't made it to 1.0, can they just skip straight to 2.0?
Ron: I think you can. I absolutely think you can, and it might be easier. It's certainly easier to launch a practice at 2.0, and not even have to go through any iteration, just like Dr. Paul did. But yeah, I believe if you're hourly billing, it's actually probably easier to jump to subscription because with all these models, the hardest part of it is not learning the new model, it's unlearning the old one. That's the biggest challenge.
Dave: Right. Right. That makes sense. So CPAs out there and lawyers, consider just going straight to version 2.0. Well, Ron, again, I so appreciate your time and it's been, I mean, you may not believe this, but this is like a bucket list item for me to interview you on my podcast. You've played such an instrumental role in my entrepreneurial career. Again, my heartfelt thanks to you.
Ron: Well, thank you, David. That's great. I really appreciate that. It was a great conversation. I enjoyed it.
Dave: All right. Thanks. Have a good day.
Ron: You too.
Dave: There we have it. Another great episode. Thanks for listening in. If you want to continue the conversation, go to IC-discshow.com. That's IC-D-I-S-C-S-H-O-W.com. And we have additional information on the podcast, archived episodes, as well as a button to be a guest. So if you'd like to be a guest, go select that and fill out the information, and we'd love to have you on the show. So that's it. We'll be back next time with another episode of the IC-Disc Show.