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Ron Baker

The Importance of Leading With Value in Your Firm


Pricing is a crucial part of the modernization process for traditional accounting and bookkeeping firms looking to revamp the way they do business and open themselves up to new value. But views on what Value Pricing is can vary as much as advisory among accounting firms.

Sep 14th 2021
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What precisely is Value Pricing and what does it provide for your firm? Let's dive into what it really is and can offer to the modern firm. 

At its most basic level, value-based pricing focuses on charging a flat, bundle fee that encompasses the entire scope of value that you intend to provide your clients instead of charging your clients a specific price for each of the services you're providing on an hourly or hourly per-service basis.

Value-based pricing has many structural benefits that seek to reduce the complexity of billing for your team. As a primary benefit, the structure it provides allows the client to budget better for the service. The flat fee doesn't change, month to month, and isn't based on the components of work you put in, but rather a single price that is easier to predict.

In addition, value-based pricing focuses your firm on efficient delivery. As you're no longer paid by the hour, it allows you to optimize workflows to ensure that you're still able to provide the same level of service without having to worry about a potential loss of revenue from reducing the number of billable hours that you're bringing in.

When you use value pricing, you take the time to explain to your clients the why behind the costs of your products and services. You describe the specific work that needs to be done to accomplish your client's goals. They have a clearer understanding of precisely what they're paying for.

Value pricing allows you to tailor your services according to each client's individual needs and circumstances, arriving at a fair price for their particular situation. You can also tier your services, offering your clients some latitude to choose the package they feel would work best for them. Choices in service levels will give them more of a sense of control, as well. They are free to select from basic to premium.

Why It's Worth It

Regarding the accounting and bookkeeping industry, pricing does more than set the tone for the client relationship. Pricing on the onset allows you to convey the value that you're trying to provide your clients.

Value Pricing allows you to craft a more profound and long-lasting relationship with your clients and transforms how you interact with your clients in new ways.

The first is that you are creating a commitment to your client by moving from a transactional approach, an hourly approach to a more structured cadence. The change in pricing structure removes the impermanence that comes with hourly work. You are creating an atmosphere that promotes conversation that promotes discussion. It allows you to form a better working relationship with your clients because they are not scared of getting up charged for asking potential questions or seeking clarity in the reporting that they're receiving.

The second change is that it promotes the client to take action. The openness that comes with the structure of most value-based pricing options puts pressure on clients to seek out additional support rather than you having to upsell them.

Having clients come to you is an excellent position for accounting and bookkeepers because you are providing a list of what you're able to do to your clients. You're giving them the option to seek out these services to help support future business growth. It's always a better position to be in, to have someone coming to you rather than seeking them out to you perform a service.

When it comes to value-based pricing, one thing that needs to happen at the onset of your new relationship is the essential value discussion. Most accounting firms are beyond the point of switching to value-based pricing because they see the value there is and can charge upon the price option for their clients. 

We find that more people are just not doing it as effectively as possible, which we want to address here. The value discussion allows you to understand better your client's business telescreen their aspirations, things that you wouldn't typically discuss potentially in your transactional meetings, which enables you to not to get it but in your studio where you're hoping to take their business.

These are items such as the goals for their business and their plans for their life. Are they looking to retire in X amount of years? Are they looking to fund another opportunity?

Understanding these aspects of your client clients business will allow you to support them in better ways. When having this discussion, this is the opportunity for you to put everything on the table for them to discuss exactly what you're going to be providing them and what that means for them.

Most people don't care about the specifics of the services you're providing. As their financial profession, they believe in your technical expertise. Instead, They are looking for the benefit that that brings in our business. 

Value-based pricing provides an excellent opportunity to talk about how you are working with them in this capacity to get them closer to those goals you discovered. Support the value you're bringing by tying it to their end goals and creating a conversation beyond the normal scope of just achieving business success.

As your business advances technologically, reevaluating your pricing model may be necessary. The practice of billing by the hour is outdated for most accounting firms. If you want to reap the most benefits for your firm and your clients, consider moving to value pricing. Or, if you're starting a new firm, try value pricing. Watch your business grow as you leave a lasting impression on your clients.

The Dext Academy seeks to equip every accountant and bookkeeper with the skills they need to meet the future needs of businesses. Bringing together industry experts from across North America, Dext Academy provides you with the practical and strategic guidance you need to take your company to the next level. The Dext Academy, designed for forward-looking leaders of firms of all sizes, offers content written by industry trailblazers including Mark Holton, Ron Banker, Kellie Parks, and Ryan Lazanis. Check back frequently as articles will be added regularly!

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