As busy accountants and bookkeepers (advisors), our focus is always on getting the required work done so we meet the outcomes we have promised to deliver for our clients. Usually these outcomes are based around tax filings, reporting, payroll; all the day-to-day things that make up the necessary work that we have to do to to keep businesses compliant with legislation.
But how often do we stop to think about what our customers really need outside of the everyday work we do as advisors? How do we really show our value as advisors – the work that really gives the business owner a clear picture to allow them to make decisions? It can be anything from a customised report to a meeting where you and your client map out the next year business plan for growth.
Or, it could be reviewing their pricing strategy.
Yes – you read it the first time, reviewing their pricing strategy! We have an incredible ability to help our clients with more than just compliance work, and helping our clients with a pricing strategy is just one of the things we can contribute to help transform their business and achieve the freedom they desire.
But first, we have to take our own advice: appreciate our own value and review our own pricing strategies.
Break the chains of the billable hour
How many of us are still trapped in the the billable hour? As a previous practice owner myself, I felt trapped until I realised I was leaving thousands upon thousands of dollars on the table every time I presented my client with an itemised bill, which showed my activities and the time and rate against it.
All my client saw was the onerous activity and the mounting bill. They didn’t see the outcome: how the work I had done has impacted their business and their life. I was devastated, and to make it worse, then they would dispute the bill.
It sucked. It really did. I realised that I had to change what I was doing. By presenting my bills in this way, I wasn’t expressing the value I was providing, and I was also allowing the client to micromanage me.
What did I do? Value pricing to the rescue!
Pricing is a mixture of art and science
Taking the journey to move from the billable hour to value pricing involves a change of mindset; it’s a mixture of art and science.
The art side of it is where we take the time to have, what I like to call, the ‘Value Conversation’ with the client. It’s a process of discovery, where we uncover the clients’ known and unknown pain points, work their objectives, and understand what they want to achieve. This is where we use our human psyche to work with others, develop a relationship and build trust.
This step is vital, and it’s one we often miss.
The science side of things is where we physically scope the work that needs to be done – such as determining the financial requirements, reporting or data collection for the business. As technical people, this is the part we often gravitate towards first, and we often look to tools and formulas to help us get this together to deliver a price. This gets us part of the way, but the problem is that is doesn’t get us through the entire journey. We miss the art part!
The pièce de résistance is when we bring both of these aspects together to provide a set of solutions to the clients, and provide prices for these solutions. A tip: always provide three solutions to the client and present the solutions, whether that’s in person or virtually.
Costs do not determine price
A common conversation I have with advisors centres around one question: “How do I know if I have got the price right? I have to measure my costs.”
Let me reiterate here, our costs do not have to come into play when we price the client. When you hire a tradesperson to perform a job for you, do you ask them to breakdown every single cost they intend to pay in outgoings before you agree? No! They don’t tell us what things cost them – and neither should we as firm owners.
We need to price the client and the work, according to our value set. Every client is different, they may have similarities but each are unique.
How do we create value?
So that’s the big question. How do we actually create value and, most importantly, demonstrate this to our existing and potential clients?
The art part of the pricing equation is the key to this. To get that right, there are a few things we need to look at:
- PAIN – What are the clients pain points?
- JOBS – What do clients want to get done?
- SUCCESS – What does this look like and how do we measure it?
By looking at these three specific points, we’re able to pull together solutions to present to our clients and, most importantly, have the opportunity to show our value in a human way: by recognising the issues they are facing and demonstrating how our expertise can help. It could be something as simple as pointing out unclaimed sales tax! All clients want money back in their bank account.
Imposter syndrome – we get too close!
This is one of my favourite topics because so many advisors speak to me about it. When we start this journey of ‘Commanding the Price we Deserve’ and we present our solutions to our clients, sometimes we may feel that we are not who we say we are.
We simply don’t value ourselves.
But we should! We are all in practice because we want to help small business and because we are damn good at what we do. Advisors often bring specific industry experience to the table. Don’t be a shrinking violet – stand tall! Present your solutions and the prices that go along with it.
We can’t be everything to everybody, but we can be something to somebody! So if the client doesn’t want to engage or objects, ask why. If they still don’t provide you with the opportunity to accept your offer, move onto the next one.
It isn’t personal. It just may not be the right time, the right fit and so on. Get your hustle back on and go find your somebody … swipe left!
If you are reading this, then you’re already on your journey towards having a practice that wants to help small business succeed and, in the process, have a successful business yourself – one that gives you the lifestyle and freedom that you want.
You recognise that your own pricing structure is a part of this journey.
Don’t wait. Get started on your value pricing journey today!