Value pricing is transforming the way many accounting firms are now pricing their services and the profits they are making.
The challenge is, it isn’t easy. We have to understand the basic fundamentals and in this article I will explore the first fundamental.
1st Fundamental: Pricing face-to-face
You absolutely must have a price conversation face-to-face with your client.
The reason for is very, very important. You have to involve the client in the process. You have to ask the client questions to understand what they want, and what they value. Until you know what they value you can’t come up with a value-based price. And as part of that face-to-face meeting, once you fully understand their wants, needs and what constitutes value to them, you have to agree the price with them.
Let me share with you the big mistake I always made, so you can avoid it.
When I ran my own accounting firm, which I started back in 1996, I had many meetings with prospective clients. During the course of the meeting I would impress them with the things that I could do (tax planning ideas and business advice) then inevitably they asked the question, “So how much will it cost?”
Panic would set in and I would say, “I don’t know, I’ll have to go away and think about it.” And so I would go away and create a written proposal and send it to them.
That is the worse thing you can possibly do.
When you send your value pricing proposal through the post or via email you are out of control of the process. It is almost certain they will immediately skip to the section showing the price. And they’ll make an instant judgement (usually, ‘that’s expensive’) based on that price, without reading the rest of the proposal.
So you have to keep control of the process by revealing price in the meeting so you can deal with any price objections and make sure you fully paint a picture of the value.
So how do you do that?
You need a system.
The problem with value pricing accounting, bookkeeping and tax services is every client is different. There are so many variables. Some clients are big, some are small. Some want extra added value, others just the compliance. Some are limited companies, some are sole traders. Some have awful books and records.
They’re all different, they all want different things and they all value your services different.
The only way to give everyone a unique price, in a way that maximises your price, is software.
Mark Wickersham FCA
Mark Wickersham – Chartered Accounted, public speaker and #1 best-selling author – is known as the most sought after profit improvement expert in the accounting community. Follow him on Twitter.