How to price bookkeeping services
I received an email a short while ago from a Chartered Accountant called Patrick. He told me how he’d used a process to get 4 times his normal price for his bookkeeping work.
You can watch the whole video here.
I’m going to share with you the techniques he used to achieve this in 3 easy steps.
The first thing Patrick did was to create and use a brochure. He called it “Taking Away the Hassle of Keeping the Books”.
There are several reasons why I strongly recommend you have a professional brochure.
Firstly, it is one of the strongest forms of marketing. You are professionally packaging your services and this influences people’s perception of what you do.
They will expect high standards and they will expect a high price.
Secondly, your brochure becomes your script on how you would run a meeting to properly communicate value to the client.
Patrick’s second technique was to package his...
An enormous range of prices
One of the things I’ve found in my benchmarking studies is the huge range of prices in how much firms are pricing for automatic enrolment.
I’ve come across many who don’t know how to price it and are doing it for free! I have heard of many firms charging approximately £500. I have heard of firms charging £2,000 to £3,000. And I have even heard of one firm charging £6,000.
So, given the huge range - from FREE to £6000 - it’s very clear that as a profession, we don’t know how to price this opportunity. It’s very clear that some firms have found a better way; they are more comfortable about their pricing and are getting better results.
Auto enrolment is such a big opportunity for the UK accounting and bookkeeping professions but we need to have a system to price it properly… otherwise we risk...
Many business struggle with their profits and their cash-flow. They work crazy long hours and aren’t making enough money.
The biggest reason for this is price.
The price is too low or the pricing strategy is wrong.
Most businesses price using emotion, their gut feel, and by copying competition. They ignore price psychology and price strategy, proven price tactics.
We need to figure out better ways to price.
I recommend you watch the whole video here or click on the image below.
Here’s an example…
Let’s use this small business havebike as an example. They are a small London-based business that provide a mobile bicycle repairing service.
You can from their website that see they use the menu pricing system with 3 options which is great!
But if we look at the difference in their price options we can see a huge gap between the ‘Deluxe’ and ‘Super Deluxe’ packages.
Firstly, I believe, for a London-based business, all of...
Why you must have an upselling system
When someone buys from you they are in buying mode. They want to purchase. Which means they are also at the most receptive stage to buying more from you.
So how can you maximize the opportunity for upsell?
You need a system in place, that’s how.
What is an upsell?
Upselling involves selling something extra to your customer. It’s something that’s evident in all sorts of industries. In the car or consumer technology industry it could be extended warranties for example. And generally it’s particularly powerful in high value transactions.
You need to find something else that you can upsell to your customers. So, if you are selling annual bookkeeping at £5,000 for example you will want to add in something extra for a price such as £100.
When people are already in buying mode and you offer an additional, smaller purchase like this they think they are already spending £5,000 so what’s another £100....
I believe that the accounting profession is an incredible profession.
Accountants make a profound difference to the lives of clients, and, as a result, we should be very well rewarded.
Unfortunately, that's rarely the case. Most accountants are working way too hard for way too little money.
That’s how it was for me when I first started my own accounting firm back in 1996. It was seriously hard. In the space of two years I had grown it to about 200 clients. It was growing fast, but I wasn’t making any money.
I was working longer and longer hours, it was crazy! But I think that's the state of most accountants and bookkeepers around the world; we work too hard for too little.
It all changed when I implemented value pricing…
When I started to put in place value pricing systems in 2000, my results changed so significantly that a few short years later I was able to sell my accounting firm.
Since then I’ve been teaching accountants around the world...
Making the middle option top choice
I often talk about menu pricing and the power of three. It’s truly powerful stuff. It’s the fact that when faced with three options people tend to gravitate towards the middle option.
And it works with pricing too.
So you might only currently offer one package – your tax return package for example. By adding more services and creating two other packages you will find that many will choose to pay you more by going for the middle, and therefore more expensive, option rather than your basic package.
But how do we get them to do that?
There are things you can do to prompt your customers to pick that middle option but essentially it boils down to one thing. Social proof. It’s something we learn from Dr Robert Cialdini, author of Influence: Science and Practice. Social proof is one of the six main laws of influence. It is defined as follows: “As humans we are lazy when it comes to decision making. When it comes to making...
The power of free
Everyone loves a bargain. But actually there’s something they love more.
Getting something for free.
The most powerful word in marketing
It’s the most powerful word in marketing. And it’s used all over the place in marketing copy.
A powerful way of presenting your prices to customers is through menu pricing using a tick list of options that shows customers what they do and don’t get. It’s visual, powerful and it works. And most of the time that technique means a series of ticks and crosses.
But sometimes you can add in something different. You can add in the word free.
It’s even more powerful than a tick.
As I’ve already said people love getting something for free. They love getting something more than they expected. It stands out.
Don’t go overboard
Of course, it could be tempting to go overboard. To use it everywhere. But don’t.
People like getting a bonus. Something extra. But use the word free...
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.
How to do it
Essentially it’s a 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 solutions when you are first designing...
Why clients need to pay you in advance for annual accounts
I have talked in the past how you should ensure that your payment terms enable you get paid in advance before you start the work. It helps your cashflow 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 installments, or in 12 installments 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 it to clients?
People tell me they love the idea...
Always give the client 3 options
Menu pricing means giving the client different options or different packages to choose from. More importantly, giving them three packages. This means that they can choose an option that suits their circumstances and means clients end up paying more. Now I’m going to share with you some advanced techniques around menu pricing.
You can find the full video explaining these techniques, as well as 3 other powerful videos, when you sign up for my free video course here. This is also where you can sign up for my upcoming free webinars and begin your Price Consulting journey.
How can a tick list help?
The first idea is what I call the tick list technique. What this entails is creating a list of all the various things that will be done as part of a service, and then across three columns, using a tick list format to denote which things are included in which packages.
There's a reason why this is powerful. It's very visual and...