Pricing has been a dominant topic of discussion inside advice businesses and at industry conferences, and the subject of many books and papers, for decades.

Every year, seasoned advisers and business owners walk out of pricing workshops having had a major revelation.

This is a concern given how fundamental pricing is to business success.

Business owners should intimately understand what they are selling, how much it costs to deliver, how much of it they can sell, and the margin required to make a decent profit.

In simple terms, cost plus margin equals price.

Ideally, advisers should know this before going into business. Realistically, they should have it finessed by the end of year one.

Yet, five, 10 and 20 years later, too many advisers still aren’t confident about their pricing. This suggests that advice businesses have not spent enough time and energy on their Client Value Proposition.

A compelling CVP is at the heart of every successful, thriving business. It separates the average from the exceptional.

It is one of five essential ingredients need to be a leading advisory firm of the future, alongside a compelling employee value proposition, shareholder value proposition, a defined enterprise architecture and a strong culture.

When it comes to developing a compelling CVP, there are three key factors to consider.

Who is my target client and what is the biggest problem they need solved?

Thinking about your chosen client segment, be they, medical professionals, retirees or middle class mums and dads, list the hardest challenges they’re facing. Which of those challenges can you help solve?

If the hardest challenge is managing teenage angst, there’s not much you (or anyone) can do about that so keep moving down the list until there is something you can fix.

The harder the problem, the more value you are creating and the more you can charge.