In my last article, I discussed the model of value pricing and the benefits this billing structure offers you and your clients. However, in order to set up the right value pricing for your client, you need to know what questions to ask first so you can later sell your value. Here are some tips on how you can better understand your client's business and pain points; as well as determine if they are the right clients for your business model. Also, you need to not be fearful of the sales conversation you'll have to hold.
So, while the a la carte model of value pricing is static, exactly what goes on that menu will be specific to the industries you are targeting. A critical element in starting an accounting practice is determining the niche you're targeting. Every market is different and has different reporting, as well as analysis needs: For instance, a retail business has different requirements than a nonprofit. If your accounting practice specializes in a niche sector or two, you should already have a general idea of what accounting menu items it takes to manage their financials.
Before you meet with a prospect, it's a good practice to understand the company. You can start by going to its website to thoroughly acquaint yourself with the businesses—size of the company, number of employees, locations (virtual and brick & mortar), marketing messaging and target customers, most recent company news and so on. For instance, if the company just won three new high-profile accounts, its accounting needs have likely just increased. This is the research phase.
After you've done your research, set a meeting to discuss what your prospective client is looking for. This is the discovery phase. For this you need a standard questioning methodology so no matter who does the intake (you, business development, junior associate or an assistant) you will be sure to gather all the vital details. A big misconception when pitching clients is that you have to dazzle them with your words. I've always found it more beneficial to be a good listener, really understand their needs and then develop a program tailored to fit them. Letting a SMB owner gush about their business goes a long way for your future relationship with them!
Here are some basic questions to start with (you can add and modify as you go):
- Tell me about your business.
- What kind of customers do you target and why?
- Talk to me about what keeps you up at night.
- What are your short- and long-term goals for your business?
- What systems do you use currently?
- What do you like about your current systems?
- What don't you like about your current systems?
- In a perfect world, what would your systems do and tell you on a daily, weekly, monthly basis?
- Why are you looking for an accounting professional?
- What are you looking for in an accounting professional?
- What went wrong in a previous accounting professional or consultant relationship?
- How do you like to communicate with your staff, customers and accounting professionals? Email, phone, text, video conferencing?
Make sure every question is open ended so you can take really detailed notes and layer on follow-up questions, such as:
- Can you elaborate on that?
- What did you mean by that?
Finally, be sure to ask about who the decision maker is: Are you speaking with them or are there others that will need to weigh in before a final decision is made? Most importantly, really try to find out what is important to them—what is going to move the needle. Is it the lowest cost solution? A better understanding of cash flow? How to get paid faster? All of these factors need to be gleaned in order to sell them the right value pricing package.
Now, the hardest, but most important, question. After the prospective clients have gone over their pain points, ask them: "If I were able to solve your issues and create a collaborative relationship where you have the data you need at your fingertips, what dollar value would that be worth to you?"
It's OK to ask, because they are business people and ask these types of questions of their customers all the time! If you find that too hard to ask in that way, an alternative question can be what their budget would be for what solving what they have discussed with you. This will help you get a better idea of what they value and why before putting your proposal together.
And as I've mentioned before, not every prospective client is the right client. Don't be afraid to turn down business if it's not in your wheelhouse—if you're not familiar with the industry—or do not have the time or interest in learning it. Also, if the client is just looking for a cheap solution, this may be a red flag. You can catch this early by asking the prospects what they value so you can determine whether it is worth your time coming back with a proposal. Remember, today's cloud accounting is about partnering with clients. If they are looking for lowest cost provider and not how you can make a positive impact on their business, it may not be a fit.
Remember your value and what you offer to the potential partnership and don't limit yourself by numbers of hours in a day by charging hourly. Remember, loyalty comes when your services are valued, not necessarily if you have the cheapest price tag. That being said, this a la carte service might allow you to start small with an on-the-fence client and then work to upsell them at a later date as they grow to see more value in what you're offering their business.
About the author:
Amy Vetter, CPA, CITP, CGMA, is the Global Vice President of Education and Enablement for Xero. In this role, she is responsible for developing and executing Xero's worldwide education strategy with a focus on Xero University (XeroU) and Xero TV. You can find other blog posts by Amy on business topics and yoga at: http://thedrishtiqcpa.blogspot.com/.