How to Price New Accounting Services
So you’ve decided to offer software advisory services to your clients. Now what?
Well, first, there are some key questions to answer, including:
- What do clients actually want from you and your firm?
- Why are you offering these services?
- How do they add value to your client and your firm?
- How are you going to price these new services?
In addition, remember to focus on what resonates with new and existing clients alike and and why they choose to involve you in their business and their lives. This is your point of differentiation in the marketplace, that thing clients talk about when singing your praises to their friends and family.
If you’re not sure what it is, that’s okay. You can make it up; so long as you believe in it and articulate it, others will too. For my firm, the focus was enabling small business owners and their advisors to buy back time in their lives from their businesses by implementing simple, effective technology solutions.
What Do Clients Want, and What Can You Offer Them?
There are dozens of services clients would pay for if they knew you offered them. Ones that have a technology connection include:
- Business Software & Systems Reviews
- Payroll Systems & Software Review
- Cloud Transition Strategy
- Monthly Management Reporting
- Business Process Outsourcing (BPO)
- Software Setup & Installation
- Ongoing Support (SLAs)
- File Maintenance
- Budget Setup and Analysis
- App Integration
- Virtual CFO Services
So what can you do to influence the client’s perceived value of what you are offering?
One thing to remember is that you are the “X Factor.” We buy from people we or others like, believe in and trust. Your ability to relate to the client, understand their needs, connect with their core purpose and actively demonstrate empathy can go a long way to raising the perceived value of engaging you and your firm. In fact, I would recommend forgetting about pricing a service until you fully understand what the client wants. It could be:
- Peace of mind
- Enhanced understanding of their business
- Communication at their level of understanding
- Education/Knowledge Transfer
Take another look at this list, and put yourself in the shoes of your most recent client. How many of these list items were you conscious of when interacting with them? Would you buy from you (or others) if none of these elements existed?
Additionally, always remember they are paying you to get the job done right the first time. This is simply table stakes for the privilege of being a professional and servicing a client, and we should never gloss over this fact.
The introduction of a new service or product provides you with the opportunity to introduce a new pricing model.
Accounting and bookkeeping firms basically have three methods of pricing for services:
- Fixed fee (a price set by the firm and sold to the client)
- Value pricing (what is the outcome achieved by the service worth in the eyes of the individual client)
- Hourly Rate (which creates uncertainty of the total cost for both the client and the firm).
Although we may pretend the price or rate is not a factor in purchasing decisions, it is! However, if price was the determining factor in all our purchasing decisions, why do we often buy products things and services that cost more? The answer: We perceive they offer more value.
My experience is that many accountants and bookkeepers undervalue themselves. Perhaps it’s a confidence thing, or maybe there’s comfort in continuing to offer the same services with the same pricing formulas. Interestingly, clients also are reluctant to change advisors, even if they are dissatisfied with their services. As a result, we have a profession that is struggling with change and a client base that isn’t asking for additional help.
Here’s what you can do to enhance your value in the eyes of clients:
- Take time to understand the emotive reasons they are looking to engage with you and your firm
- Ask questions about their business, industry and workflow challenges
- Bundle services (example: offer monthly bookkeeping with software solutions and ongoing support)
- Avoid discounting
- Offer service package options and let the client select which suits them best
- Share your industry knowledge online and at local events
- Specialize in specific subject matter (example: service vertical markets or niche in specific software add-on tech stacks)
Value isn’t always easy to find. So, have more discussions with your clients and offer up-front education and knowledge transfer to build the relationship and discover what’s important before price is discussed.
When you are value pricing (unlike with hourly billing), you are not losing revenue by taking more time to get to know the client’s needs and wants. You are investing in the foundation for value creation. Cultivate a business owner, entrepreneurial, partnering mindset.
Clients (especially new ones) may initially engage you to purchase a solution for a specific task, which is transactional and often viewed as a commodity. However, you are both best served by moving beyond this first phase to you becoming an integral and trusted partner of their business. This is where the real and fulfilling value resides.
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Clayton Oates is recognised as a respected member of the Accounting | Bookkeeping and Technology Industries in Australia and Internationally. He has been working in (and consulting to) the Accounting | Bookkeeping and Software Consulting industries in Australia for more than 25 years. After completing a Business (Accounting) degree at Monash...