How this accountant got 3x higher price repricing a client - Interview with Jhonatan Aldama

inspiring stories Jan 03, 2022

 

You need to systemize the process of communicating value. Words are so important.  The wrong words will get the “That’s expensive” reaction we all hate.  The right words will get the client to buy and buy at higher prices.  There is so much at stake with the words we use.

You can systemize the communication by creating standard scripts, proposal templates and pricing brochures for your core accounting services.

This is a story from Jhonatan Aldama, who is getting great results from pricing.  If you would prefer to watch the full interview, you can find it on my YouTube Channel here: https://youtu.be/K3DoPgayFJc

 


 

Jhonatan Aldama’s Success Story

 

Jhonatan Aldama’s firm Nuve is based out of Austin, Texas. They are a virtual accounting firm serving clients all across the US and launched in December 2020.

In a recent interview together, Jhonatan shared with me some of his major pricing struggles that he faced early on in his practice, as well as how he turned things around to get some amazing results.

 

“I had no control over what I was going to make”

 

Jhonatan told me that one of the main issues he had with his pricing was that he started with hourly prices because he wasn’t sure exactly what he should price for his services. Jhonatan said, “I wouldn't know how long a project would take, so I would say, ‘Hey, I'm going to charge you X amount hourly and see how long it takes’. So, I had no control over what I was going to make, and the clients were left guessing: ‘Is this going to take five hours? Or is it going to take 30 hours?’”

Jhonatan also found that the hourly rate made his schedule really tight because he had to be billing every hour to really make money – and he wasn’t even really making money because he was under-pricing himself.

He also wasn’t good at differentiating the prices of different services he offered. Jhonatan’s bookkeeping and advisory work would both have the same hourly rate because he didn’t know how to figure out those different prices.

Jhonatan told me, “That was the biggest pain point: having no control, not knowing what to charge, not having a structure, and not being able to communicate it to the client. So they expect me to do whatever they need, at the same base price, and very quickly. And it honestly was making the work not very fun.”

 

Starting from the ground up

 

At the start of the pandemic in early 2020, Jhonatan decided to go remote with his business because he couldn’t go into the office or visit clients in person anymore. That allowed him to see that he could do things differently with his pricing. He started doing some research, attending webinars for accountants and learning about virtual accounting firms.

At this point, Jhonatan was introduced to me and he joined my Value Pricing Academy. Jhonatan said, “That’s when I really started learning about value pricing, and I really clicked with it. I decided I needed to completely launch a new firm based on this, and really grow and have a vision of where we're going, what we're going to do. So from about June to December when we launched last year, that's when I buckled down and created a new mission and vision of this new accounting firm.”

Jhonatan then started creating his own pricing packages and models and created a methodology of how he was going to operate and stand out from standard accountants. Jhonatan said, “It was honestly just starting from the ground up again. That was what most of my last year was focused on doing in launching Nuve, and creating a value-based accounting firm, not just a service-based accounting firm.”

 

The importance of a pricing system

 

Jhonatan learned the importance of packages which helped him to guide his clients to the specific services they needed. This opened a more communicative process between himself and his clients. Jhonatan uses my Effective Pricing software to create these packages and to price pretty much everything he does for clients. This allows him to create a price for his clients during their proposal meetings instead of it being a guessing game.

Jhonatan told me that, “Before clients were wondering, ‘Where did you get that price? Where did you get your hourly rate?’ Now the system is giving them a price as they answer the questions, and by the time we get to the final price, they know how we got there based on what they chose and wanted.”

This process can be difficult in the beginning, and Jhonatan told me that he was nervous starting out. He had to make sure he tested his pricing models beforehand to make sure they came out with sensible prices for his clients. But, he said, “By the end of it, you’re so confident in how to build the model, how it’s pricing, and you’re creating that value for your client. So it gave me more confidence with my proposals once I really understood it.”

 

Jhonatan’s results

 

Jhonatan told me that this process has helped him to make sure he’s not just guessing what a price should be. He also said it really allows him to sell a client the value of his services.

He gave the following example, “We repriced one big client that I was spending about 10 hours a week on. We moved them to value pricing and created a package for them, and their price has increased significantly: it’s going to be about $70,000 for 2021 [up from $25,000 in 2020]. But the time I’m now spending on them is about an hour and a half a week.”

So with this particular client, Jhonatan is now getting almost three times the previous price, and spending way less time doing the work, and that’s largely because now in his conversations with clients he focuses on the value, the outcomes and the results, rather than the number of hours he’ll be spending. 

Jhonatan said, “Because clients relate value to hours spent sometimes, I’ve been able to get them away from that, so they understand if I’m bringing them the value it doesn’t matter if it takes an hour or 10 hours. So that’s helped to increase how people interpret my value.”

Jhonatan also told me that, now that his clients appreciate his value, he has been able to upsell them more services and provide even more value for them.

 

The importance of mindset

 

Jhonatan told me that he believes that mindset is crucial to achieving these results. He understands that for growing businesses, price and budget are huge pain points. That’s why he gets his clients to focus on the value rather than the specific prices, because he’s creating long-term value for businesses. Jhonatan said, I definitely think it's more of a mindset that we have to get into as an accounting firm, and then be able to communicate that properly to clients. Because one of my core values is transparency: we want to make sure clients understand what we're doing. I'm not just trying to make more money from a client, I want them to grow. Because if they grow, I grow. It's going to be mutually beneficial. So, we have to get in that mindset too.”

 

“Value pricing gives you an overall happiness”

 

I asked Jhonatan how these amazing results have benefited him. He told me the two main big benefits were profit and fun.

Value pricing has helped Jhonatan be more profitable because he’s no longer under-selling himself. He knows the value of his own services and he can communicate that to clients.

And in turn that makes it more fun. He’s happier to meet with clients now he’s being paid what he’s worth and he enjoys his work and the people that he works with. Jhonatan told me, “I think that's what I love about our services: that we're able to pick our clients, and if we don't want to work with someone, we don't have to. I think this value pricing gives you an overall happiness of where you are and what you're providing because you're being valued as an individual and as a firm.”

 

Jhonatan’s top tips

 

Jhonatan shared with me the top tips he would give to anyone who hasn’t started value pricing yet based on what he’s learned. He replied:

  • Have an end goal and know where you are going in 5-10 years because that way you can create the path to get there and incorporate value pricing into that to get to the spot you’re shooting for.
  • Value pricing is a mindset. You have to get your head into that thought process. Take the time to really understand why and how it works, and how it’s going to create value, not just for you profit-wise, but for your clients too. That will help you get more motivated to achieve your goals.

 

If you want to watch the full interview with Jhonatan, you can find it here: https://youtu.be/K3DoPgayFJc

 


 

If you found this valuable and would like to learn more about value pricing, I run a free live online training session every month with a topic chosen by you. Attend live and you can ask me any questions you have. Click here to register and I will send you an invitation to the next session.

And if you would like to join a community of like-minded accounting professionals learning to price more effectively and confidently, you can join my Facebook Support Group here.

 

Wishing you every success on your pricing journey.

Mark Wickersham

Chartered Accountant, Public Speaker and Author of Amazon No.1 Best Seller “Effective Pricing for Accountants”

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