Pricing Ethics: From Airplanes to Accounting Practices

In episode 134 of The Woodard Report, Joe Woodard sits down with Ron Baker, co-founder of Threshold and renowned pricing strategist, to explore the ethics and applications of pricing models, particularly in the age of artificial intelligence. Using the airline industry as a case study, Joe and Ron unpack yield management, dynamic pricing, and how these principles apply to accounting and advisory practices.

From airline pricing to advisory practices 

Ron shares the historical shift in airline pricing, from full regulation before 1978 to the competitive, yield-based strategies of today. He explains that airlines now change prices millions of times daily, factoring in variables like demand, events, and even whether a passenger is traveling alone or with someone.  

“All pricing changes have happened from the supply side, not the customer,” Ron explains.   

The discussion highlights how these same principles, segmenting customers, adjusting prices based on value, and protecting price integrity, can be applied in professional services. 

The good, the bad, and the ugly of AI pricing 

Joe outlines three scenarios for AI-driven pricing: 

• The good – Leveraging customer data to deliver better experiences and proactive offers. 

• The bad – Using data to price at the highest level a customer is willing to pay. 

• The ugly – Exploiting personal situations for profit, such as pricing emergency travel excessively.  

Ron draws a parallel to professional services, warning that firms have even more client data than airlines, creating both opportunities for tailored value and risks of crossing ethical lines. 

Price transparency vs. pricing transparency 

A key takeaway from the episode is the distinction between price transparency (knowing the final price before purchase) and pricing transparency (understanding how that price was determined). 

Ron states: “[The] distinction between pricing transparency and price transparency is huge.” 

Capacity management and protecting value 

The conversation shifts to the importance of adaptive capacity - leaving room for high-value opportunities rather than filling every available “seat” in your practice.   

“…leave some space in your practice for the client who's willing to come along and pay what it's worth,” Joe advises.  

Ron agrees, adding, “…there should always be capacity for your best customers.”  

By resisting the temptation to sell every billable hour, firms can improve client service, invest in their teams, and maintain premium positioning. 

Practical takeaways for firms 

• Segment your services like airlines segment cabin classes.
• Use client data responsibly - value pricing should be client-first, not opportunistic.
• Maintain adaptive capacity to respond quickly to premium clients’ needs.
• Protect pricing integrity even if it means turning away low-value work.
• Focus on outcomes over time - clients buy transformations, not hours.  

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Thank you to our show sponsor, CorpNet!

CorpNet is the trusted leader in business formation and compliance services, offering one of the best tools for accountants, CPAs, and tax professionals nationwide — the CorpNet Partner Program. 10X your firms revenue by helping clients form a business, register for payroll taxes, maintain compliance, and more.

This article was generated by AI and reviewed and edited by a human.