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 best guess is better than nothing because even with something like tax planning, there is always going to be some uncertainty.
You might be able to calculate that you can save the client somewhere between $75,000 and $150,000. So you may tell the client you can save around $100,000.
That’s going to help them see value much more than if you just said ‘we will save you some tax and it will cost $5,000’.
Quantifying the amount the amount the client will save also makes your price look much smaller in comparison.
The challenge is, the benefit that you deliver is going to be more subjective. It’s harder to measure. Sometimes value is just a feeling. Nevertheless, always try to uncover some numbers.
It may be that you have to ask the clients some questions. You can go through a questioning process to identify something that you can quantify.
For example, let’s say you are talking to a client, new or existing, and they have been doing their own quarterly sales tax return (in the UK we call that VAT). Imagine the client has been really struggling with doing the sales tax returns - that’s why they’ve come to you.
You could ask ‘how much time are you spending on this?’
They may tell you they spend a couple of hours each time. But it’s quarterly so times it by 4.
Ask them ‘how much is your time worth?’
If they give you a figure, let say it’s a local mechanics and they charge $150 an hour, that’s $150 times by around 8 hours. Which means every year your client is losing $1,200 worth of time.
Putting a number on it makes it feel more real, more painful - then you can come in and take the pain away.
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Wishing you every success on your pricing journey.
Chartered Accountant, Public Speaker, and Author of Amazon #1 Best Seller “Effective Pricing for Accountants”
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