3 Big Opportunities for Firm Owners as They Sell Their Services
Value pricing, service packages and efficient automation of onboarding clients are all the rage in the profession of public accounting these days. Firm owners are feeling the necessary burden of becoming business owners instead of just technicians. If you are a firm owner, then these topics should be at the forefront of how you sell services to your clients.
Selling is going to make you successful as a firm owner. It’s a skill you can’t go without if you want to remain competitive and continue to grow your firm. Selling is a skill you can grow in, and these 3 big opportunities can give you a jump start with what to target as you focus more on selling.
#1: Value Pricing
Value pricing is now a solid way to price services in a firm. It’s no longer a trend. It’s time to take notice of this fact, as it can allow you to make more money serving the right client.
Our firm has been pricing our services for over eight years now, and we have not tracked time since beginning this journey. Pricing is a way to calculate your services up front, for the right client, for a price that represents the appropriate value to you and the client. Where billing for time would essentially price all clients the same, with the assumption that all services had the same value, value pricing assigns different prices to different clients, depending on the value that the client and firm have agreed upon before work began. Value pricing allows everyone – the firm and the client – to know what the price will be before anyone agrees to pay or do the work related to the price.
Value pricing shares risk more appropriately between firm and client than hourly billing. Under hourly billing, the client just ‘gets what they get’ in terms of what the service and bill will be when the work is complete. Many clients do not like this unknown part of billing. It’s unsafe. Whereas, under the pricing model, the client agrees to pay a certain amount before the work is commenced, and the firm agrees that this is an appropriate price for the defined work they are going to undertake. Value pricing makes more economic sense than billing because pricing is already how we acquire many of our services and products. It’s a familiar form of economic exchange. Humans are most comfortable if they know what they are getting, and for what price, before they agree to buy it. Firms should begin to practice the art of pricing, and see what it feels like to sell to the right client and make double what you were making from similar services before.
#2: Service Packages
Many assume creating packages in your firm is part of value pricing, but it’s not. Value pricing is really a methodology of what your firm believes about how it gets paid (or ‘captures value’ as the pricing proponents put it). Packages are just an implementation of pricing into a firm’s business model, and are made simpler because of a firm’s ability to price their services. I’ll explain.
When you price your services, that means you know what you are going to do for the client before you start your work. And, as any good value pricing firm will do, you will give each client three options: a high option, a middle option and a lower-priced option. Different options will contain different types of services, depending on what services that particular client will find most valuable.
Now that the art of pricing has allowed you to price your services up front, you can sell packages to your clients, instead of selling your services (so to speak). So, value pricing can make creating packages easier because you can’t sell packages unless you first know what goes into those packages. Firms will take the creation of packages further by breaking down their prices into timeframes: weekly, monthly, quarterly or annual pricing.
Now that pricing has been successfully separated from the service, these firms can then draft their clients’ bank accounts or credit cards weekly, monthly, quarterly, or annually, regardless of when they perform the services. As you can see, selling services with the vehicle of packages creates a lot of flexibility for the firm to collect their revenue. And, there are even more creative options, such as giving a discount to a client who pays for their annual package all up front instead of monthly.
#3: Automation of Client Onboarding
Automating the client onboarding process is yet another extension of the benefits of pricing and creating packages. I believe all firms should develop a robust client onboarding process. But, an onboarding process is of particular importance to a pricing firm. Here’s why.
Remember that pricing happens up front before the service is begun. The scope of those services is also established up front. The scope of the services are the defined things you will do for the client, for the price you have agreed upon. Unlike billing firms, pricing firms must establish the scope of what they will do for the client so that you and your team do not do more, or less, than is required of you in the scope. Scope (which should be defined in a written contract) defines all of the services that are to be performed for the price, and defines when those services will be completed. It makes client service much clearer since everyone can refer to the written contract to know if the client is being delivered what the firm promised.
But, billing firms don’t need to define scope because intermittent, arbitrary client requests can define scope. If a client needs something, all they have to do is ask and then the firm starts the work and begins billing time. That’s when the clients begin to drive the firm, which ultimately burdens the owners with a lot of client requests.
Automating the client onboarding process for pricing firms is so important because of the amount of work it takes to define scope, create a contract, explain the contract and have it signed, request billing details (if you plan on drafting your clients), and finally begin the service with the assigned team member in the firm. It takes our firm around a month to get the whole client onboarding process completed (and we usually end the process with a gift to say “thank you” to the client for working with us). The quicker you can perform client onboarding, the happier the client will be. In fact, a well-defined client onboarding process creates a huge level of trust with the client. The onboarding process has just defined for the client why they have agreed to pay you significantly higher prices than the last billing firm they came from. They feel as if you are going to take care of them. Our clients often tell us they want to copy our client onboarding process for their clients as well.
These 3 big opportunities for your firm to grow can be some of the most significant changes you’ll make in your firm. Making these three changes alone can significantly increase your revenue and create happier, well-served clients. It will make you a stronger entrepreneur, too. If you want to learn more about how my partner and I lead other firms in growing as firm owners, you can join me for a free monthly Thriveal Intro Call, where I’ll talk about the benefit of growing your firm in an entrepreneurial creative community. Register for our next Intro Call here.
Editor's note: Part 2 of Jason's series is now available. Read it now.