How to quantify the value of the work you do

value pricing Oct 15, 2019

We need to become better at communicating value because your clients don’t understand what you do.

Your clients are not accountants or bookkeepers. They aren’t trained - they have no idea what an accounting professional does. It’s your job to help them understand what you do, why you do it, and how it can benefit the client.

One of the techniques we can use is quantification.

But how do you quantify a benefit? How do you quantify value?

You can watch the video here.

Sometimes it’s easy, sometime it’s really difficult. Sometimes it’s objective, sometimes it’s subjective.

If we are talking about tax planning services, it’s a little bit easier because we can quantify the amount of tax you may save the client. When we quantify and measure the amount of tax at stake and how much we can save, that helps us to communicate the value.

It helps to calculate a value-based price.

The thing is, you don’t have to be 100% accurate with this. A...

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How to pre-qualify clients and avoid time wasters

value pricing Oct 08, 2019

You know those bad clients that waste your time when you meet with them? Everyone has them.

Not all clients are good clients. Some are great, and some are terrible. Your time is precious, you shouldn’t be wasting it on bad clients. I have three tips for avoiding those time wasters by pre-qualifying them.

You can watch the video here.

#1 - Position yourself

It’s really important that you position yourself correctly so that you only attract appropriate clients who are going to be genuinely interested in your services.

Consider how you position yourself on your website.

What type of firm are you? What type of clients do you want? Put that on your website.

#2 - Customer Intake Form

If somebody wants to meet with you because they are looking to change their accounting professional, then a great tool that some very switched on firms use is to ask people to fill in a questionnaire first.

This could be on your website, or through something like SurveyMonkey.

The client has to...

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How to know when your prices are correct

value pricing Oct 01, 2019

How do you know when you’ve got the price just right?

The answer is simple - you can’t.

You will never know when your prices are right. Everyone values your work differently; they are all willing to pay different prices.

Every buyer has a maximum willingness to spend. You can’t simply ask them what that number is because they are never going to tell you. But there are ways of knowing you have got very close to their maximum.

You can watch the video here.

The first thing you need to realise is, if you reveal a price to your client and they say yes straight away, you have gone in too cheap.

They probably have a number in their head that’s their maximum willingness. If you give a price that’s below that number they will take you up on it straight away and you won’t get a chance to change the price - but they would have paid more. You’ve left money on the table.

You need to start with a high price. If the client says ‘that’s too...

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How to develop a niche and win better clients

value pricing Sep 24, 2019

Building a niche is really important. I’ll give you five reasons why…

You can watch the video here.

#1

Specialists always make more money than generalists. We see this in every industry. The brain surgeon earns more money than the general practitioner.

#2

A niche allows you to specialise in a particular industry or type of work. You can get deeper into it and learn so much more. The deeper you go, the more knowledge and experience you get, the more value you will be able to give to your clients.

#3

It saves you a ton of time. For example, if you decide to do any type of tax planning, tax compliance for clients, then as part of your CPD training, you need to go on many tax courses. You need to learn about inheritance tax, estate planning, corporation taxes, personal taxes. There are so many things to learn and we are so busy trying to keep up to date with our CPD. But if you specialise in one, you only have to learn about that one area.

#4

As you specialise and learn...

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How to get your clients to value what you do for them

value pricing Sep 17, 2019

If clients don’t see the value in what you do for them, they are going to constantly think that your prices are too high.

You know that the work you are doing deserves a premium price. But the client doesn’t know that. They probably don’t know anything about your job.

You need to communicate the value of the work you do to them.

You can watch the video here.

Here are 3 things you should be doing:

#1 - What is the client’s pain?

What pain is the client currently facing. What challenges or problems are preventing them from running their business efficiently or getting a high profit?

What problems might they face in the future if they don’t take action?

Research has shown that human beings are more motivated by the avoidance of pain than we are by the attainment of gain.

The better you are at explaining the current and potential pain to the client, the more likely they are to find value in the solution that you present to them. If they fully understand...

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Avoid the big discounting mistakes

value pricing Sep 10, 2019

Our profession is way too cheap.

We discount our prices and we crash and burn on prices. You should never discount. You should maintain the integrity of your price. Be confident about your prices, and the value that you deliver to your clients.

Discounting can be fatal.

Here’s a story explaining why…

You can watch the video here.

For 77 consecutive years, the leading business in the car industry was General Motors. 

Then, in June 2005, sales were starting to slump a little but.

They had this genius idea to do a new discounting structure. They decided to give discounts to people who bought cars in June 2005 at the same level of discounts they gave their staff.

Their sales went up by 40% in comparison to the previous year. July sales went up and they started to congratulate themselves.

Unfortunately, August sales slumped, then September sales slumped. Three years later General Motors filed for bankruptcy.

Discounting is crazy. It may bring you in more sales, but it...

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Powerful strategies for communicating value

value pricing Sep 03, 2019

Have you ever revealed your price to a client only to hear “That’s so expensive! I can’t afford that!”

It’s so annoying. We hate hearing that reaction.

But there is a reason you are getting that reaction, and there are things you can do to avoid it.

You can watch the video here.

The reason

99% of the time, the reason the client thinks your price is too expensive is simply because they don’t understand the value.

They aren’t accountants. They aren’t bookkeepers. They have no idea what it is we do in our profession, and they have no idea what you do for them.

When you reveal a price for your services, the client is going to make a judgement on that number without any context of the value of the work you do. Usually, that means they think it’s too expensive, even if the price you gave was actually really low.

You need to get better at communicating the value of your services so that you don’t get this reaction any more.

There...

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What does value pricing really mean?

value pricing Aug 27, 2019

Value pricing is a superior way of pricing.

When you boil it down, there are really only two ways of pricing: cost-plus pricing and value pricing.

You can watch the video I did on this topic here.

If you understand economics and the supply and demand equation, one deals with the supply side, one the demand side.

Cost-plus pricing: Add up the costs and add on an amount for profit.

In the accounting industry, many people use time-based billing as their form of cost-plus pricing.  It’s a crazy way to price, partly because customers hate it and partly because it won’t earn you as much money as value pricing.

Customers want certainty when buying. They want to be able to budget and plan, so giving them a fixed price upfront will give them the certainty they need.

The problem with hourly rates is you have no idea how long a project is going to take until you have done the work. That means you can’t give the client a fixed price and you instead have to give them a...

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How to increase prices without the fear of losing clients

value pricing Aug 20, 2019

Most accountants and bookkeepers are too cheap.

But, when I tell people this, I find that most people are so afraid of losing clients, that they haven’t put their prices up in years.

That’s crazy!

If you have ever felt like you are working excessively hard and you aren’t making enough money to show for it - this is probably the reason.

I did a video on this topic. You can watch it here.

You need to increase your prices. You deserve to increase your prices. So, I’m going to share with you this simple process for increasing your prices without losing clients.

Menu Pricing

It’s called Menu Pricing.

Let’s imagine that you decide you want to increase the average price across your business by 20%.

You need to give your client three choices.

You need a Bronze, Silver and Gold package. The Bronze package will be very similar to the service you provided last year, but take out the frills. Only have the absolute essentials in this package. This will be a...

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How to win high value business advisory services

value pricing Aug 13, 2019

The accounting profession has been going through some big changes with the improvements in technology, automation and artificial intelligence making compliance work very quick.

We have to do more for our clients. We have to add value.

That could be by doing planning work, consulting or advising, anything that adds value to the service.

Let’s focus on business advisory. This refers to the process of giving your client advice about their business: producing management reports, helping them reach their goals, improving their efficiency, looking at the numbers, identifying problems and suggesting how to fix them.

How do we sell more advisory services?

You can watch the video here.

Here are three tips…

#1 - Packaging

The first thing you will need to do is give your service packaging.

Your clients probably won’t know what business advisory services are. Giving it packaging helps you to build up the value of what you do by having a system or structure.

I recommend you...

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