In my previous post on pricing and basic accounting services, I reviewed the current trends in pricing, some of the knee-jerk reactions accountants make and the upsides and downsides of offering basic accounting services.
In today’s post, I discuss displaying (or not displaying) pricing on your website, having the pricing conversation with prospects and a few suggested next steps for your practice…
Everyone loves up-front pricing right?
At some point in the near future, pricing for some key accounting and tax services may become more standardized across accounting service companies and professionals. At that point, when you display on your website that you charge $X for tax return preparation, someone can compare your $X to another provider for the exact same service and it’s an apples-to-apples comparison.
We are not there yet. There are still lots of apples and oranges.
With the buzz around value pricing and price transparency, we are still not at a point yet where this is commonplace in the accounting industry. Even in the legal industry, where I have also spent many years working with attorneys on similar pricing issues, they still have not yet cracked the code on transparent and consistent services pricing after more than a decade of trying.
Unlike most products, professional services like accounting and legal have many factors that go into pricing and a lot of these factors are qualitative and intangible.
How much is error-free tax preparation and bookkeeping worth to your clients? How much is fast response time worth? How much is friendly service with a smile worth?
In order to quote a client, accountants often will ask a series of questions related to the tax or accounting needs of the client to better assess the amount and types of work to be completed. In some cases, accountants want to move this online and add “price quote calculators” to their websites.
However, unless you have a very high volume of prospective client inquiries, we usually do not recommend having these online fee calculators for a couple reasons.
First, until someone knows you well, they don’t want to spend a lot of time filling out your online form. They just want to see if you are a good fit for them before they invest a lot of time into your form.
Second, these forms usually involve collecting very personal financial information including income levels, back taxes owed, etc. With the latest scares in identity theft, this not something many prospective clients, especially small business owners, are comfortable providing on your website, at least not until they know you better.
Hiring a person vs. hiring a computer
In addition to these pricing considerations, most of your potential clients want to hire people, not computers. If they wanted to hire computers, they would just install tax preparation software and/or cloud accounting and do it on their own.
Many want to speak to you directly to get a feel for your personality, your expertise, your communication style, etc. Even if they never end up meeting with you very often (or at all) in your office, some will want to know that they are able to meet you if they need to.
While a website, a blog, online testimonial reviews and email newsletters can establish a lot of credibility, this merely drives the prospective client to pick up the phone and call you. It’s still up to you to “close the sale” via phone.
What do you charge for that?
Because of the lack of consistent pricing and packages, we encourage our accountant clients to get prospects to call for more information or to set an appointment. Then, once on the call or appointment, to have a well-crafted, well-rehearsed script with a reasonable but effective set of questions you ask to qualify and/or provide pricing.
If you already have a solid client base and want only certain types of clients, having pricing on your site might be OK as a way to scare away price shoppers. However, you should make sure it’s detailed enough and still allows you some qualifiers in case you run into special situations.
Talk about pricing over the phone or in person
It’s usually best to have the pricing conversation over the phone or, even better, in an in-person meeting. You or your front office can ask some basic qualifying questions and give pricing ranges. For prospective clients who seem to qualify, you should book an appointment for an initial consultation. We recommend that you make the initial consultation complimentary, especially for firms that want to grow.
In the pricing conversation, go through all that you provide and especially highlight your unique value-add and what makes you different. It is sometimes those fine points and unique client service aspects that really make the difference. Highlight the things that you know other accountants don’t provide and also the things that should be “red flags” when they get quotes from other accountants. For example, you might say, “if another accountant doesn’t provide you with XYZ… you should turn and run the other way!”
You do not have to be the lowest price option, but you should be price-competitive and should be able to communicate why you are the best option compared to your competition.
It often takes practice to get the pricing conversation right and you can practice and get feedback from colleagues, friends, family, etc. We sometimes use call recording (with proper legal disclaimers) to help coach our clients on their pricing pitch techniques.
You should not become salesy or sound like a salesperson (this is usually not a risk with accountants, ha). You should be yourself and honestly communicate what you offer. But sometimes this means you have to move out of your comfort zone a little bit by tooting your own horn and showing what you have done for your clients.
Often, just using examples of how you helped specific clients (without disclosing any personal information) is an easy way to both communicate your value and to also tell a story.
Be proud of your fees!
The pricing discussion is not always a fun part of the conversation, but it does not have to be painful or keep you up at night. If you provide great service to your clients, you have done your research on what competitors charge and you know where you want to be in terms of your practice long-term, over time it becomes easier to have the price conversation.
It can become very natural part of the conversation and something that neither scares good clients away, nor makes you feel like you are not getting paid a fair fee.
Here are a few practical next steps:
- Create value pricing packages
- Lots of ways to do this, but you might include your most common services in 2-3 tiers or levels of service, at a monthly service fee, plus a set-up fee
- Get as many clients as possible into the value packages
- Don’t require them (to start), but do your best to offer them to new and existing clients.
- You might offer discounts (such as 20% off the first three months) to get more clients into these services
- Build your online reputation
- This is your best tool to increase your fees and demonstrate value
- Get at least 10+ five-star reviews on TaxBuzz and Google, and then other places like Facebook, Yelp or Angie’s List
- Focus on key verticals
- Choose a few small business vertical segments to focus on
- You might start with verticals that you already know well and/or for which you already have clients
- Set goals and gradually increase the profile of your clients
- Over time, you should be able to command higher fees, get more clients into monthly packages and work with more of the clients and projects you enjoy most!
At CountingWorks and TaxBuzz, we work with our clients on many of these strategic and marketing issues and we can offer guidance on what might be the right approach for your practice. If you would like to discuss your goals to see how we might help, please call us at 1-949-438-2186 or book an appointment here.