In 1983, behavioural economist Richard Thaler did an interesting experiment involving beer. Thaler had a group of people in the study, and essentially, he wanted to find out how much they were prepared to pay for a particular bottle of beer. The product was the same for everybody, it never changed, the only thing that changed was the way it was sold.
Thaler found that people were willing to pay a very different price depending on where and how the product was sold. This is called the Power of Context. If the beer is being sold in a messy corner shop, stacked in a dusty corner, people are willing to pay a much lower price for it than if they bought the exact same beer next door in a hotel bar, cold from the refrigerator. Likewise, they would pay more for the cold beer on a hot day than a cold one, sometimes even 2 or 3 times the price! Simply changing the context in which you are selling can raise prices.
Another study in 2002 from price psychologists Adaval and Monroe tested this...
Accountants struggle with pricing!
It’s not their fault… pricing is hard.
When I am helping members of the Value Pricing Academy there 3 things that keep coming up over and over again. 3 things we need to fix.
Let me share with you those 3 big mistakes in this blog post. However, if you want the full analysis, check out this video on my YouTube channel.
Read on for the summary points or click here to watch the full video.
You are still pricing too low!
2020 was a big shock to the economy with the emergence of COVID-19, lockdowns and travel restrictions. Many of your clients have struggled. Many business owners have had to shut their doors.
And things are still tough in 2021. Arguably tougher, as businesses have to pay back the loans and tax deferrals.
When clients are struggling there is a natural tendency to want to help by keeping prices low. The trouble is that’s not really...
As a professional, it is your responsibility to help your clients in as many ways as you can and deliver as much value as possible. You do that by spending time thinking about them.
Imagine you’ve already done all your thinking and you’ve come up with 5 great ideas to help your client – let’s call them Mary. What do you do now…
Which of your ideas is the best? What could it be worth to the client? Can you put a number on it?
Perhaps you can help save them $50,000 in tax, or you might be able to help them get an extra $20,000 in their overdraft if they are struggling for cash. It could be you implement some technology that helps save 30 hours of admin work a week…
Once you have your top ideas ready, contact Mary.
You could email, but a phone call would work better. Here’s what you might say…
“Hi Mary! I’ve been thinking about you and your...
Would you agree that adding as much value to our clients as possible is the right thing to do?
Now, let me ask you another question…
When you add immense value to your clients and change their business and their lives, do you deserve to get better paid for that?
I’m seriously hoping your answer was a resounding YES to both!
In the accounting profession, you hold your clients’ businesses in your hands – their livelihoods, their passion. You have the power to make a huge difference to their lives by helping them to build a better, more profitable business.
Accountants and bookkeepers do amazing work, and you deserve to be paid well for it!
When you price based on the value you deliver, it’s a win-win situation. Your clients get more value, and you get a better price.
That’s what value pricing is all about.
The reason our clients come to...
Scope is creep is probably one of your biggest costs, but it can be totally invisible!
You need to be able to spot scope creep when it is happening so that you can address it and adjust your price accordingly. You should never have to make a loss on a job.
Here are 7 common examples of scope creep to look out for…
When the client gives you corrupt data, or they haven’t given you the data in the format you wanted, that is a scope issue.
At the outset of the project, you should build into your proposal or fixed price agreement very clear instructions on how you need to receive the data, and also what will happen if those conditions are not met.
This used to happen to me all the time! Clients would drop off their books and records – and in those days, back before cloud technology, it was all held together in a paper bag!
When projects end up taking longer than you expect, you end up making losses on the job.
How do you solve that?
I’m going to share with you a 7-step framework to stop you suffering from scope creep ever again.
Have you ever got to the end of a project, produced a work in progress report and realised you spent way more time on a project than you initially thought you would, but have no idea why?
You end up having to write time off to make sure the client will pay your bill – you end up making a loss.
You need to become more aware of scope creep and be able to spot when it is happening. If you know what to look for, you can identify scope creep and deal with it before it becomes an issue and costs you money.
You should deal with scope right at the outset of the project. You should discuss it in the pricing conversation.
I met recently with one of my students who told me about her immense success. Here’s what she posted in my Facebook Support group:
I just had to interview her!
Lana signed up for my How to Price Bookkeeping course, and after studying value pricing and implementing the new practises throughout her business, there were 3 clients in particular that she managed to get great results from and demonstrate her improvement in pricing.
The first client was an education consultant.
She had a bookkeeper but wasn’t really satisfied with them, so asked Lana to double check everything was in order.
Lana noticed there were a number of accounts that weren’t entered, and several holes in the paperwork needed sorting.
She priced this clean-up work at $2500.
But, the real value pricing achievement came when Lana priced her bookkeeping…
When you have a price conversation with a client, the better you are at communicating your value, the more business you will convert at higher prices.
Recently one of my students asked how to create a pricing brochure for bookkeeping services, so I’m going to share with you how to do that.
Having a professional looking brochure shows that you are professional, you are the expert, you are experienced and have clearly done this before.
When people see you as the expert, they are more likely to want to buy from you because they want to work with the best, and they will be willing to pay a higher price for the privilege of working with the best.
2020 was a unique year for everyone. So much has changed and will surely continue to change over the coming years. But here are my predictions for businesses in 2021…
2020 was tough. A phrase I found myself using a lot was ‘we need to reinvent’…
We had to reinvent ourselves and adapt to a new lifestyle of working from home. We had to reinvent within our firm and learn how to communicate with our team and our clients.
Our clients have had to reinvent as well. Many of them will have gone through some very dramatic changes, potentially struggling to keep their businesses open or trying to adapt to new technology such as Zoom.
It’s been a year of confusion and challenges – however, I believe for your clients 2021 is only going to get harder. Businesses will be hit much harder in 2021.
In 2020, the governments around the world have been doing...
When meeting with potential clients, there are some best practices, structures and processes that you need to follow. I’m going to walk you through 5 of those critical steps…
The purpose of the initial meeting with a client is to understand whether or not you are a good fit for each other. A lot of that information you will uncover during the meeting with your fact-finding process.
But before the meeting you should visit their website, but also their social channels to find out something a little more personal about them, perhaps something you have in common. This could be a great starting point to create some rapport in the meeting.
Do a Google search on them and their business. It may be they’ve been in a news article because they have been avoiding taxes. It would be useful to know that before you commit your valuable time to them.
Just do 10-15 minutes of research and make some notes of potential questions or...