THE RADICAL CPA

Value Pricing Boosts Your Employees

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The emphasis shifts to their knowledge and experience.

By Jody Padar
Radical Pricing – By The Radical CPA

Do you think any of your staff studied accounting in college so that they could punch a time clock for the rest of their life? They value being professionals as much as you do. More than likely, they enjoy being valued for their knowledge and experience.

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Given the choice between being valued for their time or valued for their professional accomplishments, which do you think they’d prefer? Valued employees are happy employees!
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Why You Have to Define Your Customer First

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There are six steps to value pricing, but don’t skip ahead.

By Jody Padar
Radical Pricing – By The Radical CPA

Can you remember doing business before cell phones or social media? You really don’t have to be too old to remember because change happens fast. In fact, if you are over 50, you probably remember when every home had a landline, firms advertised in the Yellow Pages, and accountants charged hourly for mundane compliance tasks.

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It really wasn’t that long ago when the internet was intriguing rather than indispensable.

At some point, change becomes inevitable, and I would argue that value pricing has reached this critical stage.
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Rip That Profit Ceiling Off of Your Firm

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Here’s why pricing is so disruptive.

By Jody Padar
Radical Pricing  – By The Radical CPA

The familiar is always more comfortable than something new. Shifting your pricing model is bound to be disruptive because the billable hour is what we know and have always known. It is the default billing model of every new firm. It’s comfortable, familiar, embedded in our DNA and seems like the easiest billing solution.

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Certainly, there are some pros to billing by the hour. Profits remain relatively stable. If you work 40 hours, you know you’re going to bill and hopefully be paid for those 40 hours. There’s a clarity and certainty to it. But there are only so many hours in a week. By embracing the billable hour, you’re putting a profit ceiling on your firm.
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Follow the $25,000 Pricing Rule

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Your clients get more value and your team gets to lose timesheets.

By Jody Padar
The Radical CPA

Consider the $25K Rule.

Because this method requires heavy lifting on the front end, a good rule of thumb is to only value-price engagements of $25,000 or more. If the client falls below $25,000, they are eligible for a fixed price or fixed price plus a value add. This rule is important because if your client is a small business, it doesn’t matter how much value they perceive in your services; they will not be able to afford value pricing above a certain level.

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Most services are fixed-priced, but based on conversations with the client, those prices may drop or be raised accordingly. Some of the data points used to set pricing are the PITA factor (pain in the a#%) and the client’s gross revenue.
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