The recession - like any change in the economy - accelerates capitalism's process of creative destruction, putting more pressure on broken and unworkable models than on better ones. However I agree with him that, on its own, that will not be enough to trigger the change.
A combination of factors will contribute to this - and their combined strength will determine when the tipping point is.
- A recession, by making buyers risk-averse, will encourage value pricing because it acknowledges and reduces the buyer's risk
- New information technology enables better measurement of the value generated for clients, and therefore allows prices to be based more directly on it
- Competition will operate - once a significant number of supplier firms start to offer structured or value-based pricing, it will become hard for others not to
- Clients will be educated - there is a suspicion that value pricing is just a way for suppliers to get more for the same service. In fact structured pricing incentivises suppliers to deliver more of what clients want, which is in the client's interest; but this message will take a while to be widely accepted
- As more professional knowledge firms productise their services (e.g. the following two firms: Betternest in architecture and Jigsol in accountancy), value pricing on those products will be easier to adopt than in traditional services. Competition and commoditisation in a cost-competitive marketplace will drive this move to products instead of services.