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.
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.
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 similar price to what you charged last year - perhaps even a little higher to account for inflation.
Your middle package will have exactly the same service you provided last year with a few added extras. Add a couple of extras to the package that are high value to the client and low cost to you. You may add some extra advice, more reports, whatever you can think of.
This package will be priced at 20% more than last year’s price.
Your Gold package is going to be full of value. Build in things that you know the client will really benefit from such as helping them build a more successful business and reducing taxes. This is going to be a much higher price - 50% higher than last year, or even more.
When you present your client with these three choices, you are going to find that most people will gravitate towards the middle option. This is to do with psychology, but it will also be because you have built a great amount of value into this package.
Your clients are going to voluntarily choose to pay you 20% more. Some may even go for the more expensive option because there is so much added value in this package.
For the people that are on a tighter budget, or can’t afford the better packages, they don’t have to miss out because they still have the Bronze option. They’ll pay you the same price as last year, but you are going to do less work for them - so you still don’t lose.
With the majority of people going for the middle package, you are going to see an increase in your prices around the 20% margin that you wanted.
When you do the math, this has a huge impact on bottom line profits. You could see a 50% increase, or even double profits, depending on your cost structure.
Don’t be scared to lose clients
You have this fear of losing clients. But the reality is, you probably have too many clients.
It’s not about the quantity of clients you have. It’s about getting quality clients.
I’ll bet you have clients that you work with now that are a huge pain in the ass! Everyone has these clients. But, why are you wasting your time on them?
Life is too short to work with people you don’t like.
When you increase your prices, you may encourage those annoying clients to leave. If clients leave when you increase your prices, it can be a blessing in disguise.
If you do the math…
If you increase your prices by 20% and lose 20% of your clients as a result (which is highly unlikely), you will still make the same amount of revenue, but you will have freed up 1 whole day a week.
That’s time you could be spending with your family, friends, or improving your business. It’s time you could dedicate to further improving your client’s service.
If you would like to learn more about value pricing, I run a free online monthly training session with a different topic every month. You can attend and ask me questions which I will answer live in the session. 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.
Chartered Accountant, public speaker and author of Amazon #1 best-seller, “Effective Pricing for Accountants”
Your Pricing Journey gives you access to my pricing training delivered every month in easy to digest, and easy to implement, steps.
So if you sometimes find yourself working too hard, for too little money, this programme will solve that problem.