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How to Confidently Price New Advisory Services

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If you're considering the switch to advisory, as a female accounting professional, you may worry about whether or not your clients will be willing to pay new, higher rates. Loren Fogelman encourages you not to leave money on the table. Here, she explains how to confidently price the new services and get clients to accept them.

Jun 7th 2021
Price and Profit Coach Business Success Solution
In association with
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Offering advisory services to your clients is an advanced move. Consulting, unlike most accounting services, emphasizes your expertise rather than skill set. When positioned correctly, you no longer need to compete for business.

So, you may wonder how to strategically price your new advisory services. The answer lies in value pricing.

Most traditional price strategies calculate time and costs. Whether you charge an hourly rate or fixed fee, both price strategies lower your profits. Yes, those factors matter to you. However, they overlook what matters most to your clients.  

Your clients care about what you know more than what you do. Your insights and expertise, also known as intellectual property (IP), are your highest value. Therefore, you deserve to be well-paid for your advisory services.

Value-based pricing, unlike most price strategies, highlights your expertise. It’s possible to earn many times more than your hourly rate since it separates your fees from time.

Value is Subjective

With value pricing, the client needs to believe what she receives from your service is greater than the fees she is paying you.

Instead of pricing your cost and time, you price the client. It’s a paradigm shift.

You set the fee. However, your client determines the value of your services.

Here’s how it works. First, you need to find out why your client is interested in your advisory services. This answers the question of what’s in it for her.

It’s often some combination of the following:

  • Money
  • Time
  • Peace of mind

Then, this information influences your fees.

Sandy offers accounting services for attorneys. Like most accounting firms, her website lists a variety of services. I asked how her clients benefit from her services.

She wasn’t sure how to answer the question.  So, we rolled up our sleeves to figure out three key deliverables:

  • She reduces their tax bill.
  • Her clients receive peace of mind that their financials and trust accounts are accurate and will pass an audit.
  • She advises clients on how to increase profits and reduced write-off of unpaid invoices.

 Next, we discussed how the six critical pricing factors apply to her advisory services. These are as follows:

1. Economy. Her clients had to quickly transition from in-person to virtual services in 2020. She helped several firms navigate to cloud-based accounting. And, budgeting for the unknowns.

2.  Growth. Businesses go through various growth stages. The needs of a start-up law firm differ from an aggressive growth firm. Her advisory services can speed up growth and reduce costly mistakes.

3. Profit. Sandy’s unknowingly attracted price-sensitive clients. A subtle, but strategic, shift to her marketing message and increased fees fixed that. By enrolling high value clients, her profits rose without working additional hours.

4. Urgency. It’s possible to charge a premium fee to clients who quickly need her input. FedEx and Amazon Prime are proof that clients value, and will pay more, for fast results.  

5. Specialty. Specialists, especially attorneys, charge more than generalists. We applied this to Sandy’s firm. High value clients with a specific challenge often choose a specialist over a generalist.

6. Quality. Advisory services offer the opportunity to serve her clients at a higher level all year long. High value clients view her insights as an investment, not a cost.

It’s now time for Sandy’s pricing to reflect her value. 

Feedback is Priceless

Sandy’s current prices did not reflect her expertise. In fact, her legacy clients continued to pay her old rates.

Up until now Sandy’s firm focused on the functions, which kept her price competitive. She wanted to break-free of competitive pricing. This meant understanding value from her client’s perspective.

The following five actions helped Sandy connect with her firm’s value:

1. Surveys. Sandy sent a quick, three-question survey to her clients asking about the client experience.

2. Feedback. Sandy invited several of her best clients to lunch. She asked questions about their needs and specific desires. Several suggestions were immediately implemented.  

3. Giveaway services. Some high-value services she gave away for free because she didn’t know how to charge for them. Packaging, or bundling, services together fixed that issue.  

4. High-value clients. There were several headache clients that Sandy tolerated. Although she had concerns, Sandy learned how to let go of those clients-including her highest paying client. She’s now selective about who she accepts as a client. Attorneys who value quality and peace of mind over price are a better fit for her.

5. Offer Variety. Different clients have different needs. Startup law firms don’t need all the services that a well-established law firm requires. Sandy offers packages which bundle her advisory and accounting services together. Follow the steps Sandy used to package and value price her advisory services.

Ideal Client Evaluation

Answer these three questions. 

  • Do you have a high value client?
  • What’s her biggest challenge?
  • Do you know exactly why she values your service?

It’s difficult to please everyone. Instead, clarify your high value client. As you think about it more and more, you’ll gain awareness about her specific qualities.  

By the way, your high-value client changes as your accounting firm matures.  

Separate Your Fees from Your Time

Fully own the value of your advisory services. Charging by the hour or calculating according to your costs undervalues your expertise.

To confidently price your advisory services, it is crucial to step into your clients’ shoes. Consider what she needs and values most. Remember, value pricing is a paradigm shift.

Value pricing not only improved Sarah’s revenues by 3X’s, she also reclaimed her personal time.  With the additional cash flow, she turned her part-time assistant into a full-time assistant. And, her headache clients moved on-which reduced her stress.

The shift to value pricing takes time. Sarah thought about this for years, but always postponed the decision. Adding advisory services gave her the push she needed to finally follow through with her intentions. Once it was done, she wondered why she had waited so long.

Women have long been key contributors in the tax and accounting profession, bringing new ideas, perspectives and insights to an industry that’s traditionally comfortable sticking to the familiar. Yet, despite huge strides, recent survey results suggest female accountants are less confident and less equipped to take on new business challenges than their male counterparts at a time when creativity and challenging the status quo is needed more than ever. See the stats and get the knowledge you need to empower women in your practice.

 

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