Have you ever had the thought cross your mind that charging your clients an hourly rate may not be the best way of operating your tax or accounting practice?
Perhaps you've started to realize that you've hit your capacity in this model. After all, there are only so many hours in the day.
Or, maybe you just don't know how to effectively sell your services and communicate your value to prospects.
We get it. Hourly pricing has been a staple of the tax and accounting industry for decades--and it will continue to play a major role in the future. In many cases, hourly pricing makes sense. But if you've ever had any of the thoughts I mentioned above and want to embrace the future of accounting, it may be time to start integrating another option: packages.
What is a package?
In short, packaging involves creating a clean, clear product out of your service and making the intangible, well, tangible.
While these aren't exactly like the packages delivered to your door by the postman, the types of packages your practice can offer are infinite. They can be developed based on level of service, business classification of the client, complexity of their finances, or even a specific niche. It's all about optimizing your offerings--and the specific services you excel at--to be as efficient and valuable as possible.
Think about it from the buyer's side: Your prospects don't really know what they're getting from you until they've already paid and experienced your services. So, rather than giving them abstract information about what you will do for them during the hours they pay you, show them the results they will get from working with you--for an exact price.
Why should you use packaging?
Services positioned as products make it easier for clients to actually see the value you can offer them--all while creating growth opportunities by moving you toward value-based pricing. There are countless reasons to start selling packages to prospects and clients, but here are a few of the most relevant uses:
1. Use packages to define and sell your services.
Which of the following sounds easier to sell:
- A concrete, "productized" package of services with clearly defined results your clients can expect, or
- A list of services you offer alongside an hourly rate that gives no real estimate of the end cost or final outcomes?
When buyers have a problem, they are looking to purchase a solution. Simplifying your offerings and making the buying process as easy (and explicit) as possible will ensure your clients and prospects truly understand the value you offer and are willing to invest in having a piece. People should not have to jump through hoops to work with you.
Additionally, packaging makes it easier for professionals to set boundaries and stay within the scope of their agreements. A package says exactly what it includes from the get-go, so not only will you look even more legitimate from the outside, but you will also be preventing any "scope creep" from occurring.
When you know exactly the amount of work you will need to do to achieve results for a certain client and their chosen package, you'll have less ambiguity and will be able to focus your practice on your own goals and needs.
2. Use packages to scale.
This one is obvious, but worth stating: there are a finite number of hours in the day. We all know this is the case, and yet we continue using pricing models based on time, which cap our growth potential at the number of hours we (or our employees) are capable of working.
That is an anti-growth strategy.
Packages are more of a subscription-based model, so you are more likely to have repeat (or continuous) clients. As long as you keep showing your value is worth the money, there will be a higher likelihood of them staying--and from there, the growth opportunity just keeps increasing.
When you sell your value (rather than your time) and continue becoming more efficient at the processes that create that value, your practice will scale up exponentially faster.
3. Use packages to create more free time.
While it may feel complicated at first glance to wrap your various services up into a nice little box, the time you invest in designing and defining your packages will be dramatically offset by the time you will save in future business engagements.
Think about it this way: as you've continued to increase your experience over time, you're probably getting more efficient with your work. So even if you charge more per hour than you once did, the amount of revenue you bring in is still entirely dependent on how much time you spend working. Even the most level-headed accountants and tax pros will have trouble limiting their work hours under this model.
If you have valuable services to offer--and I'm sure you do, because accountants and tax pros are vitally important for individuals and small businesses--then why not ensure you're getting paid for the results you create and not the time you spend creating them?
What should these packages look like?
Here's the best part--this is your chance for your creativity, expertise, and long-term aspirations to really shine through.
Sell what excites you. Sell what you're an expert in--whether it be a niche vertical, a specific type of tax preparation, or accounting/bookkeeping services. Sell packages that you can absolutely knock out of the park so that clients who buy into them will continue to do so for years to come.
As you develop your list of packages, keep these things in mind:
- Make it clear what you are offering, but also showcase why you are the best pro to work with for this specific niche. What value is the client receiving?
- It's a great idea to add wait lists for any packages that sell out. This way, you have built-in replacements in the queue if any business is lost.
- You can have more narrow packages and also more wide ones. Offering a smaller option, or a "starter package," can minimize the risk of a large investment and allow prospects to try you out first before growing and upgrading through your various package levels.
- Along those same lines, you can create various packages based on the lifecycle of a client. Have programs for new startups, but also develop growth packages for established companies looking to expand.
- A good place to start is with just one package. Go for an area that you think would have high demand, keep it simple (one service), test it out, and see how your clients respond.
Maybe you've been holding onto fears about package-based pricing for a long time. It's a big transition and definitely requires buy-in from all members of your practice. Perhaps you even worry that introducing packages will simply turn your sales efforts into a price war with your competitors who are also packaging their offerings. However, not all packages are created equal, and if you've been avoiding them for that reason then consider this your wakeup call:
Using packages does not mean you are now selling a commodity.
It's quite the opposite, actually! Packages can absolutely be created for niches and can be uniquely crafted to cater to high-end, highly lucrative client relationships.
Packaging your tax and/or accounting services can absolutely take on whatever form works for you and your specific offerings. Start out playing with just one simple package and see how it works out. Who knows? This could be the barrier-breaking transition your growing practice has been searching for.
If you have questions about how to start selling packages as part of your tax and accounting practice or want to learn more about other sales funnels, we're here to help! Contact us today at 1-800-442-2477 x3 orset up some time to speak with one of our digital marketing experts.
See the insights of this article summarized in a video by our CEO and founder, Lee Reams II: