Have you ever come across another tax or accounting practice that’s charging tens of thousands of dollars for a service you essentially give away for free? It’s a frustrating feeling to see your peers making bank on something — and not being able to figure out how they do it. Sure, tax and accounting services aren’t a commodity. We’ve discussed this often on the blog. But when you see such a large discrepancy in price between two practices, it makes you wonder:
What is their secret?
Charging high prices generally does indicate higher quality. However, that’s not the only factor at play. Your services are of high quality too, aren’t they? So how can you start charging prices that match the value you have to offer?
Dealing with Price Resistance
Spoiler alert: everyone deals with resistance from clients on price. Not every client or prospect will push back on how much you charge, but many will — and haggling with them until you’re barely turning a profit is not the way to be successful. It’s also important to keep in mind that price is rarely the only issue when your practice is facing resistance. It may be the most convenient to push back on, though, so it’s often the most vocalized objection by prospects.In this context, the overall goal of selling your services should be to focus on the value you offer, and to make it so that price is not an object. Not sure how to do it? Here are some tips to get started:
1. Do your homework.
Without understanding who you’re selling to, how can you expect to convince them to work with you at the price you propose? It’s important to do your research and ensure that your messaging — whether online or in-person — is going to resonate with your audience and speak to the challenges they face everyday. Furthermore, you should know your niche markets inside and out and cater your marketing and lead generation efforts to those potential clients. If it does come to the point where you are in direct negotiations with a prospect, make sure you have:
- Covered all of their concerns and objections
- Developed a clear understanding of the value you can offer them
- Found out who your likely competitors will be for earning the business — and find out what they charge
- Decide ahead of time what terms would be acceptable at a minimum (in order to keep yourself profitable)
2. Offer solutions to business problems.
While it can be tempting to simply list out every potential service you can provide, that doesn’t help your prospect visualize their issues being resolved. When you instead explain the solutions your practice creates, the other party will focus on the value you offer. The important caveat here is to ensure you are creating a two-way conversation. Don’t assume you know the prospect’s pain points — ask them. When you have a definitive idea of the challenges they are facing, you can design your solutions “to help the customer every step of the way, ensuring that each customer’s unique problems are solved by the journey’s end.”
3. Use value selling.
Value on its own doesn’t have to be an ambiguous idea, either. In reality, you can put a price on the amount of value you offer your clients. Here’s how it works: “Value selling is a sales technique that leverages customer anticipation of enjoying the benefits of the item for a sale. With this approach, the sales conversation focuses on how the buyer’s life will be improved with the asset at hand, rather than the actual features and hard-facts related to the product.”In other words, “the value is the difference between the price you charge and the benefits the customer perceives they will get.”The more you pivot the conversation to help your prospects focus on the value of your services, the less important price will become.
4. Avoid comparison.
As we mentioned above, tax and accounting services are not a commodity, and therefore cannot be compared as “apples to apples.” Consider this situation: a prospect says you and your competitor offer the same service, but theirs is cheaper. They ask you to come down on price to undercut the competition, and then they’ll consider working with you. How would you respond? Rather than allowing the conversation to pivot to price concerns, take control of the context here. What the prospect may not understand is that you and your competitors actually do not offer the same service. Because of this, there is really no valid comparison. Showcase the ways you are different without being sucked into the Bermuda Triangle of Service, Quality, and Price. There is no one-to-one comparison of two practices — different professionals, different offerings, different solutions.
5. Focus on outcomes.
Ambiguity is uncomfortable for most people, so it makes sense for someone you’ve never worked with before to be wary of spending their hard-earned money on your services. But while you should never offer guarantees to ease concerns, you can use hypotheticals to shape a story and uncover the true source of objections. For instance, if you are a tax and accounting firm talking with a small business prospect, you could spin it this way: If working with our firm could save you $100,000 from effective long-term tax and financial planning, would it be worth a $10,000 investment? If they say yes, then the objection was never really about price — it was about their confidence in your ability to deliver a specific outcome. Now that you have a better idea of where the hesitation lies, you can take a better approach to effectively sell your services. Note: This tip has the potential to be highly effective for your practice, but it’s important to approach it with care. For instance, here’s something you should never say as a tax professional: “If I can get you a $10,000 refund, would it be worth a $1,000 investment?” This is obviously a major red flag to clients (as it should be). No tax pro should ever promise a certain tax refund amount, as that could indicate you’re willing to do whatever it takes to reach that goal. Tread carefully.
6. Package your services.
One way to make it clear that your clients are getting a lot of value for their money is to start packaging your services. Packaging is essentially turning a set of your services into a tangible product — this way, it’s easier for the client to wrap their head around and foresee the value you can provide. Plus, when you use packages as opposed to other methods like hourly pricing, clients know exactly what they will pay. This transparency often leads to less price sensitivity, since you’ve removed the ambiguity from the equation.
7. Understand proper negotiating.
Sometimes, your price is simply outside the realistic budget of a prospect. However, this does not mean you should start decreasing your asking price with no other changes — that would be bargaining, not negotiating. If the prospect seems invested in working with you but insists they cannot afford your price, then you can consider negotiations. Think about it this way: "Bargaining is about focusing on who is right. It is competitive and win-lose. Negotiation is about focusing on what is right. It is cooperative and win-win.” In the context we’re discussing, negotiating is when you make “adjustments in terms, conditions and scope of work between two parties,” while bargaining is when “you are asked to do the same work as you have proposed, but for less money” — end of story. To improve your negotiating, start working on developing these important skills and habits:
- Clearly defining concessions
- Speaking second
- Steering clear of ranges
- Refusing to "split the difference"
- Writing terms at the right time
- Speaking with the decision maker
- Getting for a give
- Talking more than money
- Being human
- Knowing when to walk away
If the prospect demands a lower price, then they’ll have to make concessions, too. Know how to put a price on different aspects of your value, and charge people accordingly.
8. When in doubt, use silence.
Many times, simply being quiet is one of the most important skills for dealing with price resistance. If you’ve presented your terms and your prospect is thinking, don’t undermine yourself by jumping in and breaking the silence. Allow them to start the conversation. This indicates that you have confidence in your service and the price you are proposing. There are tax and accounting practices out there right now that may be charging ten times more than you for similar services, all because they’ve mastered the art of value pricing and overcoming price objections.
If you can get a handle on this skill, your practice’s revenues will start growing exponentially faster. If you have questions about overcoming price resistance, we’re here to help! Contact us today at 1-800-442-2477 x3 or set up some time to speak with one of our digital marketing experts.