By Matt Solomon
The way you price your services, how you sell them to clients and whether you can deliver at (or beyond) their expectations are key factors that determine the level of your success. If you do those three activities well, it should be easy to grow a profitable business, earn a great income and maintain a clear work/life balance.
The problem is that accountants often don’t know how to price, sell and deliver correctly. In fact, the old (traditional) model that accountants use to price, sell and deliver services to their customers often leads to customer dissatisfaction, employee frustration and you working too many hours under too much stress.
In many ways, this old model is fundamentally flawed. Let’s take a closer look at why.
In the old way, pricing is where the problems start. The old way of pricing establishes the wrong dynamic between the customer and the firm, which creates a whole host of issues:
- Pricing is done based on the market – not on the value of the service.
- Pressure to keep prices competitive leads accountants to negotiate their fees or offer services for free.
- Firms make big promises to their clients without knowing how to consistently deliver results.
- Customer-client exchanges are transaction-focused and don’t feel meaningful or satisfying.
- Accountants end up resenting clients for not understanding their true value.
This approach to pricing leads to a misperception of the value of accounting work. Customers aren’t clear on what value is being offered, and accountants feel that their work isn’t being appropriately appreciated – or compensated.
The old model for selling is where most of the pricing problems come home to roost. If firms can’t identify and articulate the value of their accounting services, it’s almost impossible to get customers to understand the value either! As a result, it becomes difficult to sell accounting services. Here’s how the traditional approach gets it wrong:
- The old way of selling relies on an outdated approach to compliance services
- Lack of training that leads to “winging it” (often unsuccessfully) in sales conversations
- Overreliance on existing relationships or personal charm to sell services
- Giving away free advice to demonstrate their value – which often leads to clients undervaluing their expertise
- Sales strategy that doesn’t have much strategy – send proposals and hope for the best!
As you can see, this method is like throwing spaghetti at a wall and seeing what sticks. It lacks a clear strategy and reinforces the poor dynamic between accountants and clients that we saw with pricing – clients aren’t clear on what value is being offered, and accountants feel the need to push to sell their services.
Delivering services to the customer is the final step in this process, and it’s what most accountants spend most of their time doing. If you’ve ever felt like you’re trapped on a hamster wheel, you know how it feels to “deliver” over and over without really getting anywhere! In a traditional approach, delivering looks like:
- High volumes of customers and work, but low profit for you and your firm
- Income tied directly to the number of hours you work, which leads to long hours and significant stress
- More time spent with numbers than with people; less time for your family and your personal life
- Constant fear of losing clients to competitors (who offer the same services that you do)
- Clients who fundamentally misunderstand the value you provide
- Two words: tax season
Most accountants would be happy to never suffer through a tax season again. But if your firm is delivering services the old way, then tax preparation probably makes up a big part of your business.
The New Way
Hopefully, you’re now convinced that the old model for pricing, selling and delivering is broken! Fortunately, it is absolutely possible to free yourself from the old way of doing things. There is a better way to price, sell and deliver – and when you adopt this new method, you will attract better clients, work fewer hours and be able to build a business that supports your lifestyle (instead of the other way around).
The new way to price, sell and deliver involves:
- pricing for value
- selling as a form of service
- delivering with confidence (and a game plan!)
It’s hard for huge accounting firms to make such a big shift, but there is nothing stopping you from shaking up the system. When you move beyond the status quo and start giving customers exactly what they want, you’ll receive compensation for value and a better quality of life in return.