The golden rule with proposals, is they should only ever be sent to confirm what has already been agreed upon in a meeting.
You should agree on a price with the client in your meeting whilst you are still in control of the conversation.
When you do build your proposal there is a structure you can use. You want to reinforce all the great stuff that you do, the value and the benefits to the client. There are 5 elements that you should build into your proposal…
#1 - Restate the pain
Start your proposal by reminding the client of the pain they are currently facing or will face if they continue as they are. People are more motivated by the avoidance of pain than by the attainment of gain.
When you spoke to your client you hopefully uncovered what their problems are, what they need solving.
Open your proposal with a reminder of this pain.
#2 - Quantify the pain
If you can, try to put a number to that pain. You can uncover some of these numbers in your meeting...
Pricing is one of the four ‘P’s of marketing.
Marketing is essential to the success of a business.
It’s also important to know that if you want to win more clients, you need to be seen as the expert in your field. You need to be seen as the best. You can create that reputation through marketing.
You can watch the video here.
Marketing has changed many times over the years. We are seeing huge shifts towards social media.
LinkedIn is a great platform for the accounting profession. Twitter as well. But Facebook is arguably one of the most powerful social media marketing tools.
I used to recommend LinkedIn as the number one marketing tool for accountants. But digital marketing is rapidly changing. Over the last four or five years Facebook has increasingly become the place to be.
In the future I imagine it will be something different again. But right now Facebook is the top platform.
As Facebook started to gain traction, everybody became obsessed with creating their...
I made this mistake all the time when I first started my accounting firm. It took me years to realise it.
The mistake is basing our price on the competition.
Many accountants, myself included have done this…
Click here to watch the video
I’d go to the potential client. I would say all the right things. I’d impress them with what I could do.
Then, during my meeting with the prospective client, I would explain to them how I helped with taxes and planning and it would really help me if I could see a copy of last year’s set of accounts so I could fo through and look for some tax planning opportunities. Which I did.
But the real reason I asked to see the accounts would be to flick to the back page and look for the previous accountant’s fee.
Having got that number I would propose a price of 5-10% less than the previous accountant. In hindsight, this was a terrible method of pricing.
I won lots of business this way, I grew my...
The proposal is an important part of your pricing process, but most people get it wrong.
The golden rule is this: a proposal should only ever be written or sent to confirm what’s already been agreed.
The mistake people make is they meet with a client, they ask the right questions, they build up the value, the client wants to buy but we get stumped by the price question. When the client asks what it’s going to cost, we say that we will go away and think and then put it in writing and send it through the mail.
This is fatal!
You can watch the video here:
You should never do that because you’ve now lost control of the pricing conversation.
You should always have the pricing conversation with the client face-to-face. If the client doesn’t say yes to you in the meeting and asks you to go away and put in writing, you haven’t inspired them sufficiently. Don’t ever agree to put a proposal in the post.
There must be a reason they haven’t said yes....
As a profession, accountants and bookkeepers are pricing way too low.
We’re too cheap. We’re working crazy long hours for too little money.
Part of that is because we feel uncomfortable charging higher prices. This is a huge problem. We value ourselves too little.
But accountants and bookkeepers have the potential to make profound differences to peoples’ lives. We are hugely valuable. We can change peoples’ businesses, we can increase their profits, help them improve their cash-flow, save them time. We can really have a profound impact on what we do.
You can watch the video here:
We need to become more comfortable with charging the right prices. That’s part of value pricing.
Value pricing means that we should be putting up prices and charging based on value.
Sometimes, doing that means, for some services and for some clients, we should double our prices. I’ve seen some accounting firms treble or even quadruple prices for doing similar...
If you want to get a proper value based price, then you need to speak to the client. You can’t possibly understand what a client values until you’ve had that conversation with them.
It’s really important to have this conversation face-to-face if possible.
There are three key stages to the value conversation.
You can watch the video on this topic here. Or if you prefer you can keep on reading.
#1 - Uncover the value
You do this by asking questions. You need to ask the client the right questions to understand…
The better you are at asking questions and understanding what is important to your clients, the better you will become at understanding value. You can then build them a perfect solution that meets their specific needs.
You can charge a higher price for providing them with such...
One of the key characteristics of value pricing is that normally - not always, but most of the time - we are giving a fixed price upfront.
We have to make sure we properly scope the work. We need to understand what is needed, what work is required so that we can give that proper fixed value based price.
We come up with scope partly from experience.
Sometimes we will get it wrong. Occasionally, you will give somebody a fixed price for a piece of work, do the work and something unexpected crops up. We just have to learn from that.
Make sure you have a system in place for coming up with a price and make changes if something unexpected comes up.
What are the questions we should ask? Every service is different.
If you want to watch the video I did on this topic you can click here.
For bookkeeping we might ask how many transactions there are in a month. Clearly, the more transactions, the more scope and the higher the price should be.
But it’s not just...
How do you value price clean up work? You’d be shocked by how many times I get asked this.
It’s a tricky thing to do, but I have the solution.
Just so we are clear - by clean-up work I mean sorting out the books and records, perhaps when we take on a brand new client, and they haven’t done their bookkeeping for six months.
We need to fix that before we can start doing the current work. How do we do that?
I’m going to share with you 4 key ideas that you should think about when pricing clean-up work.
You can watch the video here.
#1 - Value Price
What’s the value of clean up work?
That’s something you will have to communicate to the client.
They don’t see any value in the process of doing the clean-up work. So, you need to communicate to them how much value it will give to them if you were to clean it up for them.
It may be they have come to you for help with clean-up work because they are behind, they’re getting pressure from the tax...
How do you calculate a price? It’s a big question I get asked all the time.
There are essentially only two ways that you can price. Cost plus pricing, and value pricing.
Cost plus is the old fashioned way of pricing in the profession. It’s based on time.
Value pricing is the superior way of pricing. We price based on the value the customer places on our service. But how do we know what that is?
The problem is we don’t - the customer will have a number in their mind that they are willing to pay based on their perception of value. They won’t tell us what it is.
Nevertheless, we have to figure out some way of coming up with a price. I’ll give you three ideas…
You can watch the video here.
#1 - Get a fixed price upfront
You need to make sure that you cover your costs. You need to properly identify the scope of the work. That comes from the experience of doing the job and knowing the right questions to ask the client and building that into your...
It’s difficult to say no to your clients when they ask you to do a small task.
But it’s taking up your time. And you are not getting any money for it.
There are some tasks we often get asked to do, like:
These are really simple, easy tasks that we often just do for free.
But this is actually a form of what’s called scope creep.
Scope creep is when the work we do for a client ends up taking longer than we imagined, and therefore we end up spending more on costs, writing time off, and ultimately making a loss on the job.
Why do we let this happen?
It happens for two main reasons:
This is a huge problem. We are giving away so much for free.
But there are stages of tackling this...