The tick list technique

I’m a strong believer in the power of menu pricing.  You create three different packages – three different options – that you then present to the customer to help increase your chance of an upsell.

But how can you best present those options?

One of the most powerful ways is the tick list technique.  It’s simple.  Visual.  Powerful.

It works.

How to do it

Essentially it’s as simple as it sounds.  You set out a table with your options on it.  Across the top are the packages you offer. Bronze, silver and gold for example.

Down the side, you list all the things you do.

Then, with a series of ticks and crosses you mark which services are part of that particular package and which aren’t.

How it helps you and your customer

Although the ultimate aim is convincing the customer it’s also useful for you.  It’s a great way to plan and structure your...

Why do clients need to pay you in advance for annual accounts?

I have talked in the past about how you should ensure that your payment terms enable you to get paid in advance before you start the work.  It helps your cash flow and better allows your clients to budget.

Many of the firms that I work with are starting to adopt this monthly in advance payment approach for annual work such as financial statements or tax returns.

You can watch the video here.

How it works

It sounds a little confusing, but it’s actually quite simple.

For example, if a client has a year-end of 31 December, then they would start paying from the previous 1 January in 12 instalments, or in 12 instalments up to the date it’s expected the accounts will be completed.

If the firm is aiming to complete accounts within three months, that 31 December year-end would be done the following 31 March and the payments would start 12 months before March 31.

How to explain...

Why cloud accounting means you must change the way you price

There’s a big change taking place in the accounting profession currently.

Actually, make that a huge change.

It’s the concept of cloud accounting. It’s fundamentally changing everything about our business. It changes how we interact with our clients.  It’s making us more collaborative.  And it means we have to change as a result.

You can watch the video here.

Why we need to change

We have to change our pricing models.  We absolutely have to.  If we don’t there’s only one likely outcome.

We’ll become extinct.

What to know why?  Well in 1988 I was a Chartered Accountant.  Computers weren’t prevalent. Indeed, in the firm I worked in when they did come it was only the partners who had them.

No one else had access. 

And so, when it came to annual accounts back then a word processing department would create them.   The...

Why you need a 7 step formula structured pricing system

There are many things in life that need structure.   Pricing is one of them.  Without a structured system pricing simply happens by chance.  By luck.

Instead, you want to control the process so that you do pricing the same way every single time.

You can watch the video here.

I have a seven-step formula for achieving this:

1)     Decide upon your price discrimination strategy

This is the strategy behind charging different customers different prices.   And this in itself is fundamental to value pricing since we know that each person values things differently.  This means we can’t have a single price and instead need to price each person separately.   One of the most powerful, and easy to understand ways of doing this is through menu pricing, giving customers a choice with a number of different options.

2)     Work out...

The upgrade nudge strategy

Today, I’d like to share a tip I learned from the science behind the pricing of menus.  I’m sure you’ve read my post on the magic of three, on how important it is to always offer clients three different packages to choose from.  However, once you've done that, what’s the next stage?  How do you price those three options?

One great strategy to use when you’re setting your prices is known as the ‘upgrade nudge strategy’, and it's particularly useful for compliance work.  Imagine, for example, you have three packages: a bronze, a silver and a gold – or whatever you decide to call them.  One of the things we’ve learnt from the magic of three, from the world of behavioural economics, is that most people gravitate towards the middle option.  And, once you know that, you can use it to your advantage.

You can find out more about how it works by watching the video...

Why three is the magic number

Today I’d like to talk about an incredibly powerful concept known as the ‘magic of three’.  In brief, it means that any solution or service you offer should always, always give clients three pricing options.  And there’s a reason it’s something all the most successful businesses do.

You can find out more about how powerful the magic of three is in my video here.

Tall, grande or venti?

What’s the most profitable coffee shop on the planet, for example?  That’s right.  Starbucks.  If you go into Starbucks most of their drinks offer three options – ‘tall’, ‘grande’ and ‘venti’ in the case of my personal favourite, latte!  Why?  It’s because behavioural economists have shown that, when faced with three choices, most people gravitate towards the middle.  

Once you know this, it’s a huge opportunity....

Do you charge clients for QBO? You shouldn’t!

When you're moving clients onto a cloud accounting system such as QuickBooks Online, you should bundle the cost of the software into the cost of your solution.

The reason is that it reduces the number of pricing decisions clients have to make. And to prove to you how important that is, I’d like you to think about the last time you bought something online. If you buy from Amazon, for example, I’m sure you’ll have noticed that pretty much everything they sell offers free package and posting.

It may not be rational - but it works!

About a year ago I was buying some batteries on Amazon. As usual, when I typed ‘batteries’ into the search box, back came a whole load of different options within the Amazon marketplace. I clicked on the cheapest, added it to the shopping basket and was about to check out when I noticed the cost of postage and packing.

I remember thinking, “That’s a lot...

What do you do if a client says you’re too expensive?

I’m sure most of us have experienced that moment when you reveal the price and your client says, "That's a bit more than I was expecting. Sorry, but it's beyond my budget." The big question then is, what do you do next?

One option, of course, is just to walk away. You may not be prepared to take on the business for less than your original price, and that's fine. It’s often a good thing to do. But let's imagine that you particularly want to win this piece of work. What do you do then?

What you should never do is automatically give a discount. That's crazy. Instead, do one of the following.

#1 Review the value

Usually, if a client thinks a service you’re offering is too expensive, it’s not because the price is too high but because they don't fully understand its value. So go back and talk about the benefits again. Remind them of the end result, of the difference it will make to their...

Is doubling your price ripping the client off?

Today I’d like to cover something that often comes up when I’m leading seminars and workshops. Almost every time I share stories of how firms using my techniques are able to double – or even treble – their prices, someone in the group will say, "But Mark, if I'm charging double what the firm down the road is, aren’t I ripping my clients off?" The answer I always give is: Absolutely not!

Why? There are three main reasons:

1: Clients aren't stupid

When your clients make a purchasing decision, they do it for the right reasons. They've chosen you because there's something about you they like. They probably know there's a cheaper alternative, but it's the same with many other things they might buy.

Why, for example, do so many of your clients buy their coffee in Starbucks when there are cheaper ways of drinking coffee? It’s certainly not because they’re stupid. (At least I hope not,...

Being too cheap can actually lose you business

Although people often think that the quickest way to grow their accounting firm is by keeping prices low, today I'll explain why being cheap can actually lose you customers.

To prove it, I'll start with a quick story. It dates back many years to when I’d first started to learn value pricing in 2000 or 2001. I’d been asked by a limited company if I could do some quite complex tax planning for them, work involving group structuring overseas and so on. As I came from a tax background though, I felt confident I could deliver.

The company asked me to create a proposal and a price. I’d already started to learn about the importance of building value, and so I created a proposal that included five or six pages of detail of what I could do for them.

How I beat one of the Big Four accountancy firms

However, it was only when I won the business that they revealed they'd been shopping around. In fact, one of the other...