Do You Know the Way to Value Pricing?

Considering value pricing? Learn from experts the essentials—plus pitfalls and lessons learned—to make your transition as smooth as possible. For additional details, visit

Hello everybody welcome to today's webinar on value pricing: The journey and what to expect. As you can see we've got a great house of folks today Wayne Schmidt who's joining me and working with me as well as Blake Oliver, Jamie Johns, Jayson Blummer and also Chad Ritner. Before we get started for all of you out there if you're not familiar with go to webinar you'll see the control panel, that's your lifeblood. You can ask questions along the way. I'll be answering them. Close out the applications that use bandwidth and we will be spending some time at the end for Q&A.

We do have a Q&A en-baked into this panel discussion already but we will be opening up to the floor at the end. Next slide. Wayne's my partner in crime over here as you can see. Next slide Wayne, we're talking about the value pricing and joint with Intuit on in regards to the Firm of the future webinar series. What we've been doing in February. This is the fourth in this series. We covered the 10 steps of value pricing. We've talked about bundling strategies. We've also talked about the pricing and bundling and this is the fourth bit.

I'm Ian Vasin, VP of product marketing here at KARBON. I've been in the industry for 15 plus years and Technology 25 plus. I have worked in Intuit before for 10 years in the pro-advisor program an I'm joined here with my partner-in-crime from KARBON, Wayne Schmidt. Wayne want to introduce your self?

Thank you so much Ian. My name is Wayne Schmidt. I've been working in the accounting industry all my life. It's a bit sad really, 28 years working with accountants, talking about accounting software. I've seen everything from the rise of.... Now we're moving cloud. My agreement is to help accounting firms grow. Leveraging things like technology, talking about what's happening in the trends.

Especially in Australia we've moved significantly to the cloud already. Most firms have already moved all their clients onto cloud accounting. What we're trying to do is impart some of the knowledge from what's happening in Australia. The good, the bad, the ugly and see what we can do to help everybody out there leverage cloud accounting.

As a context what we've been talking about for this February series, next slide Wayne, is the 10 steps of cloud. If you are not familiar with who KARBON is, we're the place to collaborate with your team and look after your clients. We bring everything together in terms of your email in one place so you can collaborate together as a group and ultimately to get work done. That's fed by timelines that brings it all together. Your contacts are management in one place. Checklists help you get the work done. To do's help ensure that everything is done on time and on quality and everything searchable, to be able to find what you need.

If you need to learn more about KARBON or to get a demo go to to get a demo. A little bit of re-cap. These are the 10 steps of the cloud. If you want to learn more go to Intuits Firm of the future from and you can find the webinars that we've done prior and some articles regarding 10 steps to Value pricing. Today's conversation, we've got ourselves a fantastic panel of folks. we've got various posts you can see on our video cams. We've got Blake Oliver, Chad Ritner, Jamie Johns, Jason bloomer. I'm going to have each introduce themselves. Again, we're going to start off with Chad because we're not sure if he's quite here on the line. Chad Ritner from Two Roads are you there? Chad is still trying to get back online. Blake Oliver we're going to go over to you first. Blake give us a 20 second, 30 second description of what HPC is about and who you are.

Sure thing. HPC is an online full-service CPA firm and I say it's full service even though it's a bad word these days in the marketing perspective. I'm head up Marketing and Technology. We specialize in particular with working with global small businesses and helping them come to that the United States. That's sort of a niche that we've grown into. Before HPC I founded an online bookkeeping called Cloud Searched Accounting and grew that to have several 100 customers and then HPC bought us. Now I'm part of HPC and really having a great time.

Thanks for joining us Blake. Next step Jamie Johns, out there from Australia, from Sky Accountants. Jamie give us a little bit of background on yourself and Sky accountants.

Hi there I'm Jamie Johns. I'm the CEO of Sky Accountants. We specialize in hospitality and the vertical of cloud accounting. We've got staff in the Philippines, we're based in Victoria and we have clients all over Australia. That's about it.

Perfect. Then one to take us home here in the East Coast of the US since we're crossing the globe it seems, Jason Blummer from Boomer CPA's with the awesomest mic of the bunch. Jason talk to us, tell us a little bit about what you guys do.

Sorry about my obnoxious mic. It's my podcasting mic so it is kid of obnoxious, I apologize. I've been running Blummer CPA's for about 12 and a half years. We're a virtual firm so we're pretty traditional, bill by the hour, have offices and we closed all those and messed up a whole bunch of stuff in the process of doing that. That's how you learn your lesson so I guess. We serve digital design agencies all over the US, that's who we serve as a firm.

Perfect. And who's just shown up from being dropped off at the last second is Chad. We tried to deal a little bit earlier but thanks for coming back on. Give us a little bit description about Two roads and yourself.

Technology is great when it works, sorry for the delay. Two Roads, we're a bookkeeping and tax shop in Knoxville Tennessee. We've got a team of 18 medical and their restaurant verticals in particular and i'm thankful to be long for this conversation.

Chad is also one of the Intuits firm of the future too. Thanks for joining us Chad.


Let's get this party started, how about that Wayne. Let's go to the next slide. This is where I handed over to our moderer MC extraordinaire Wayne Schmidt. Wayne you want to take it over?

Yes. Thank you so much Ian. One of the things we're going to be talking about is value based pricing. That can mean multiple things to multiple people. One of the things that we noticed is that terminology, there's a distinctive difference here in Australia about value based pricing and fixed fee pricing and alley pricing and hybrid models and whether you have options and all that. One of the things is Ian you've brought up some of the examples of some of the firms that are out there that are doing different types of pricing. Ian you were discussing with me how you saw the world with the 5 products. Quickly summarize for you me back then we'll get into some of the questions.

Again you may be starting from alley based billing which is typical. There's cost based pricing, there's fixed pricing, there's fixed fee billing and then there's obviously value pricing. Over here we gave 3 examples and we're going to talk to everybody here on the panel about what their doing. We've got Jamie johns is over there in the left of Sky Accountants which is a fixed fee, which is a sate up front price typically say month over month from the same client to client, in the middle here you've got % ways group from Paul Misner who's doing a hybrid, he's starting from a front price per month and adjust it according to client and client needs.

Then you've got Chad Davis over at Live CA who does a true value pricing model. Similar to also Jason who's going to talk a little bit later. Every single client, every engagement is priced individually based on the value that's obtained from both sides of the equation. Again there's a variation that exists. Value pricing is a little bit generic in terms of what people say and you're going to see different versions of that today even on the panel.

I think it's great because one of the things that I like to have a chat about is just to get that whole. There is a little bit of confusion in the market place because there's different terms banded about in how people are doing it. One of the first things, I'm going to throw to you Jamie, what i'd like to know is how you're billing. Are you doing value based pricing or fixed fees or hybrid or alley, what's your process?

We're doing pretty much all of that. We're doing mixture of all that. However 90% of ours would be fixed fees and monthly sort of payment....some type billing and a mixture of both as well but just at a lesser extent on the last 2.

Jason, your model?

We do value pricing only. I don't know if I should talk about ... There's no right way it's really every way has, is very difficult. The value pricing model is very time ... There's just so much time you got to invest up front with a client. We have another division we just launched recently and we were playing around with fixed fees so we can limit the amount of time up front that we have to spend with a client. Which sounds bad but we're trying to move the revenue into the phone firm faster so it just depends how slow you want to on board clients really, as to what you want to do.

Actually Chad, when we are discussing with at the start I can remember that you said you've always, you weren't ever charging by the hour, is that correct?

Yes it's correct. That's partly because I started a different business back in my early 20s. I remember what it was like to be on the receiving end of hourly billing. We thought, if we start a company down the road, I really want to be ... somebody that's ... Not just a transactional relationship for a vendor. Yes, right from day 1 we started value pricing. As time has gone on, I think it starts to look more like fixed because you get more comfortable as you see more and more data over time. We still do value pricing today.

Blake, I think you also started straight away on value based pricing and fixed fees.

Yes. We started with fixed fees and I think it was really critical when we hired a sales guy who just does the sales to have that sales catalog in place. It made my job a lot easier reviewing his work and the proposals he was sending out because he would just tell me about any deviations he made from that catalog we put together. At HPC we do the same thing. We have a set of fixed fees that we use a catalog that we use to create proposals and figure out the total price for the customer. One area where we use value pricing is in a cloud integration or consulting engagements.

If we are putting together an engagement or a set of applications that will save the customer X dollars per year, then it makes sense to use the value pricing model and say well you're going to get a 5x return on investment. If I'm going to save you $10,000 a year by changing your credit card processing to SEH and what not then I'll charge you $2,500 to do that. You'll get 4 times return on investment in the first year then after that it's just gravy. Those kind of engagements where you can actually create value that's tangible and it's not just compliance based, is this where we like to use value pricing.

I just want to get everybody so that we're listening to this to understanding it. As Jason said it's finding the right pricing model that suits you and also seeing what's happening in the industry that suits your clients. You don't actually have to just follow 1. However I think underlying everybody here is, the majority of people are moving away from just an alley billing mechanism. One of the questions I want to do straight away is, why change? Alleys been around for years, doctors do it, lawyers do it. In the accounting industry we're traditionally, why change? It's a big change. Jason.

Well, At the time I guess in 2008, we switched away from hourly pricing to Value pricing. I was being influenced by people like Ron Baker. When you read his book "Implementing value pricing" it's a pretty difficult text but he really does convince you that it's just best for the client, that if nothing else, no matter what model you're using just price it upfront. Help build trust with a client, help him know. I just started to feel like we were doing it wrong. By building by the hour, it just felt like I wasn't doing all that I could for my client. There just came a point where we just, we uninstall the timing billing system. Of course that's when everything blew up on me. That's how I kind of uninstall stuff and blow up everything on everybody's desktop you know at that time. I didn't feel like I was doing justice serving the clients anymore. I feel like I had to. I just felt bad about how we were doing it which we changed.

...give us a little bit about changing that. Jamie you went from alley?

Yes that's right Wayne. A little bit the same as Jason. I just felt that just straight up it was just transparent to price upfront. I've worked in numerous firms before I started Sky and I just time and time again remember seeing our partners having few disputes about clients, getting unexpected bills and it took longer than we said. Managing the expectations was pretty poor. To a fairly ... A lot of extent at the time. It just felt right for myself and my business just to be transparent. As Jason said just price up front. It drives accountability right from the client managers right through the business.

It was right for us. Probably a keep on what this whole thing about managing client expectations. Whether you do a hybrid, whether you're doing some time billing, as long as you're managing the clients expectations and you're on the same path and aligned. Then you cannot really go wrong. Fixed pricing up front for us was just the way to go because it was transparent, it was clear. It was productized. Everything we had was productized and when its productized, I don't have to sell it like my staff can sell it. That's the experience.

Good. Chad or Blake you want to add to that or keep moving along?

I think for me nobody got a situation where a client could be thinking should I Google my question because I know there's a bill attached to this conversation with my professional? That's a problem, we really felt like that's with that transaction relationship takes place and your client sees you as trusted adviser, a partner, somebody an advocate in their corner. I really feel that value pricing, fixed pricing hybrid model really helps you get that place much quicker.

I would add 1 thing which is the bookkeeper perspective because now that you've mentioned it, I did at 1 point charge hourly when I was just starting when I was in school. I was doing book keeping and I did a implementation. At the time I was doing accounts payable for 5 different companies. Driving around LA and cutting checks in their offices. I did that implementation to save myself time and I cut it like in half. The accounts payable was like in half and i was billing hourly. All of a sudden I improved the process my clients...and I was working less and making less money. I had to switch them to fixed fees as soon as that happened. It wasn't like I had planned about it. I just realized oh crap I need to fix this.

One of the things I talk about when I look at this alley model is entirely broken I think its just completely broken. I sit there as a client and I go "how do you make money off every hour I bill you?" Basically your model is "I should just go slower". I should not be like...efficient. There's no underlying fundamental to say ... I'm a changed champion. I'm a little like Jason. I'll jump off a bridge something like that. It's about fundamentally changing that conversation you have with the client. All of a sudden your going, I'm going to add extra value to your business but you've got to say i'll make sure that you're being rewarded. Jamie Adam's asked a good question here. How do you see the fixed pricing driving accountability on client managers? You talked about that driving accountability...more example?

Great question. Our experience and what we do is when we go to fixed pricing for compliance, I give the power of that to my client managers because ultimately they're 100% responsible for the client. That's probably the first point. The second point is you've got to be over the metrics on the job. What we tend to do is give and early budget in a daily huddle to the team on that job. We'll say "look you've got 5 hours to do this job". It depends on the client and it depends on the KPI's that you want to achieve.

We're very very much metric driven. In terms of the pricing. It depends on the work you're doing, we do a lot of compliance work, we'll often have price parity with what the previous accountant did. That draws accountability to get the client in the cloud. Can you outsource that job? How can you develop and improve that client? Look at all the opportunities for that client. Whereas your value pricing, we're banking this thing earlier. We can save the X amount of dollars and get this efficiency. However this is what our process because its like a success sort of thing and I said so. We do definitely look at opportunities where we can really value pricing.

At the end of the day, when you value price, your fixed price, clients have the opportunity to take that to the market place and compare that with others but there's not that many firm out there in experience to actually have the courage to go on fixed price. You've got a competitive advantage straight away. We work with clients and look at things. What's the 5 worst things in any industry and we just reverse engineer those. Accounts its not done on time. I never know what the bills going to be. We just flip that as head and say well, we don't do those things and that distinguishes you from 90% of the competition.

You're right if you get a chance to go and check Jamie's website out because I love it because he's got a guarantee there about his level of services. It's some really cool things. Blake I'd love to know the research you did. How did you go and work out ... One of the biggest things I see is everybody goes "how do I work at it?" How do you work out a price?

I have to confess that I did not come up with my pricing model on my own. I used a very sneaky method which I continue to this day. I go and I look at what all of the bookkeepers and accountants are doing in Australia and New Zealand and I rip them off. It worked really really well.... It worked really well because a lot of them are kind enough to put their pricing and services on their own websites. For everyone to see. We know what's working because we know who's succeeding and they have about 3 to 5 year head start on the US market. Given that Australians and New Zealanders are Kiwis right? They went to the cloud far sooner. All we have to do in American is just not be stupid. Not try and reinvent the wheel and just do what's working. That's sort of my philosophy and I hope that it works out.

Blake I love that. It's good old fashioned RND. Rip off and duplicate. It's seriously working and one of the things is. I can remember when we were bringing a lot of the cloud accounting products market. These didn't exist so we had to do the first website then R&D most people. Who else would ... I'd love to know how else you worked out on these pricing, the research you did. Jason?

Research. I've got to say something really fancy here. I cannot say I pulled numbers out of my butt. I cannot say that.

You can. I normally do.


We call that trial and error.

There we go. That's a ... Thank you Ian. You should have texted that to me or something so I could have said something smarter. In all honesty, pricing is very experimental which is something that really upset me at first. I thought there was a methodology and I learned there really wasn't a calculated type system to do value pricing though you look for one. It was pretty upsetting at first. We just didn't know at first that it was so experimental, you kind of just have to make stuff up. Now we actually know that is the process so we use that to our advantage and you know can sometimes double prices in a matter of 2 or 3 weeks on some consulting engagements.

It's really just all an experiment of how you sell, how you change things, how you present the value to the marketplace, are you talking to the right marketplace. We did read Ron Baker's books and stuff like that of course that really is what pushed us forward but we're always researching, were always experimenting and now I know that's actually how you do it. We'll probably never stop doing that. The research never ends because you never get pricing right. It's good to finally feel comfortable with that, is to go pricing you're never done figuring it out.

It feels good at least now I know when I don't know what I'm doing, probably part of the other world doesn't know what they're doing when they're value pricing too. That's really the research that we did, its just on going, really market related research. Client after client is an opportunity to learn if we're too high or too low. 

Yes Chad.

I'll say real quick what I think its comforting what Jason said that testing it out trial and error is helpful for somebody's looking to go from hourly to value or fixed and that you can modify it. You can go to your clients who you think might be most open to that. You've got some champions, people that are probably open and it's to their benefit in the long haul. I think what you're saying is know that you cannot modify it over time, it's a win for all parties.

I hear different things out in the market place obviously been doing this for a while and people like Rob Nixon just keep saying "well, I just keep making the price go higher and higher until they stop buying and then I drop it own a dollar". There's weird things like I do and early rate and its 1960 but its going to be 1962. Why? Because that was the year I was born. That was it. I went "I'll never be able to charge 2000 dollars a day".

Guess what you can. I've realized I used to charge nothing like that. I can't even get 1960 because 1962 sounded really silly. Sometimes you can do that you just got to do atrial and error. One of the things is, it's a good question form James. How do you get the data from the customers view point? What they think the value of the services would be? I'm actually ... we might flip that around. I think that's how you position the value to the client. The client doesn't know the value until you tell them what the value is.

Something important to mention is that you are too low then people won't pursue value. Which is something in the book keeping service, I encountered. I increased my prices and I got more customers. Its kind of intuitive but that's the way psychology works.

I suppose I can actually talk on a client end. I've been in an accounting firm that does value based pricing and they said to me. I've got rather a large tax bill and they say your tax bill is going to be this but I should be able to get it down to this and its going to cost you x amount and it was based on value and I'm going, sign me up. It's possibly a 30 mins work for him. I don't care. He was the only person that had enough nerves to figure out how to handle all the shares and things like that. To me if its half an hours work, it was the value of getting the IRS or ATL off for good. Anybody else want to answer to that before we just jump onto the next question?

I think the question there is, so Jason, do you do after action reviews? The question's really stemming from what value did you leave on the table possibly and how did you get that.

I think that's part of the pricing, some of the some of the unknowns about pricing. There's a lot about pricing you don't know. When you do identify a price, you really don't know if it was too high or too low. We always do 3 options. That's kind of a foundational tenant to value pricing. We do 3 options as a requirement when we sell to anybody to give the client the opportunity to choose what's best for them. It's hard to know, did you get the right amount? I like with what Wayne and Blake, you guys were saying is, we're the ones that really set the value for what we do. We say here's what we're going to give you and here's the price we want you to pay us, then the client says yes or no. We set the prices.

The clients don't set our prices. Client may have a budget for what they want to spend but that really is not related to what our prices is in my mind. The price is what I want to get paid because I know my business model and what it takes to run my firm and the profit margins I need to be keeping. The client doesn't know all that. It doesn't mean they have to buy it. We set the value by assigning a price to it and they get to say yes or no to it. We set the value they say yes or no to the value we've determined it to be I think.

We'll keep moving on. How did you manage the change management. The change management not externally but internally. When you get all of a sudden you're going "okay, our practice is going to go too fixed fee value based". How do you manage that process not externally but getting your team onboard because people have been billing by the hour, they've been grasping on their time sheet all year, all their life. Who wants to answer that one?

I'll just take that quickly. That took us a couple of years. We we're going from hourly billing fully to value pricing. We had to warn our clients and our team it was going to happen. At the same time we were moving to be virtual so there's a date we're going to close our office down. There was a lot of prep upfront we had to let our clients and our team know about. It fully took us 2 good years to plan all of that and I guess I'll say in any business model change and pricing is a huge disruptive business model change. The clients you have now may not be the ones you keep through the change and that's okay. The team you have may not be the ones you keep.

The services you have now, some of them may have to go away because some services can't be priced in a value way. Be willing to make sacrifices as you make those changes. Just don't be surprised when you're changing things like pricing which is very disruptive that it's going to force your hand to release team members, release clients possibly, sell in different ways to get rid of short pieces of software, cut services that are just more commodity based. It pushes a lot of change. We needed a lot of time to do it. I don't know if that's true for everybody.

Jamie you went through that change management process?

Yes I think the... is to take your key staff an the journey with you. You really need to involve them in strategies sessions, in your coaching, mentoring sessions if you're using external consultant. Just get the key players involved because I've spoken to other firms over the last few years and if you don't do that right people will get scared and some people just will jump firms because they just don't understand it. I think it's really important when you get volume. Once you get volume from your team and particularly the leaders in your team, then you can move forward together.

I was probably the worst person who would shoot off an email and say "look Jason we're doing this now and let's do this on email and not get any of them in". I think he goes "Jamie off again on a tangent sort of thing". From those days I've pulled back and say let's get together and do this together. Get by and you've just got to do it together.

Yes. I've worked with Jamie's team and they always go "oo Jamie's going to another conference. He's going to come back on Monday and he's going to be going...". We can do the buy in for the team. You've got to give them the end game point one of the things is. Just a typical change management process. It is a process. It always has been. Got to give them the end game point where we want to end. Some people might not.... Sometimes team members don't want us to be in that. That's all right, sometimes they don't want to go on the journey.

That's fine. It's a good way to move along. We do have a number of questions but I'm going to hold those till the end so don't worry. Keep asking your questions but I just want to keep going because we're running a little bit over time. If everybody gives me permission I just got a couple of questions. I'm really really insightful about ... How did you go creating the pricing bundles like Blake you just went into a bit of R&D in Australia which is great because it's a long way away. No one's going to find out. Anybody else?

Unless you tell everybody on a webinar right?

I would add that after we did our research and looked at the pricing options, we did do a fair amount of work internally figuring out what would work for us. Not all the offerings or what's included is on the website. A lot of firms in Australia tend to like wrap the tax in with the monthly fee. I guess you guys file on taxes on a more frequent basis. We do that once a year and a lot of people don't even get that from the same place. We had to modify for our purposes and what I ended up doing was creating an elaborate spreadsheet that attempted to create a model for our pricing. It would have inputs and outputs and I would input a number of bills to be paid, number bills to be entered, number of transactions, number of bank accounts.

I would try to figure out a mathematical model that will allow me to put in the number of bank accounts for the number of bills and what not, number employees and figure out what this should cost based on the time it takes. Whether the payrolls we clear bi-weekly or monthly. Then I had this elaborate model and I was able to use that to say "okay well, can I simplify it? Can I make it easier and easier". Finally we got it down to 3 metrics for the bookkeeping. Number of bank accounts, total volume of monthly expenses and what was the last one? That's really funny I can't even remember. It was 3 things that we had to know to do the bookkeeping pricing. We'll just say that's our secret sauce. Is that fair?

I'm laughing.

Let me create 4 tiers out of those 3 variables. That fit 90% of the customers. Maybe that's what you other guys did on this but I found that worked pretty well. We did it for payroll and bill pay as well.

That's one of the great things about this like moving your firm to the future and utilizing products like quick books online is that you can ... There's a lot of processes you can now automate or you can now ... You're not having that travel time. You can do things faster and more consistently. Jamie also would love to know your pricing bundles. You've got them on your website so everybody can see like Blake.

Yes look from that perspective like with the website it's sort of a piece of marketing and it gets people in a center that's fixed and that's transparent. To take it further in we do a lot of virtual book keeping, virtual CFA work and as you know Wayne every client we see we offer bronze, silver, gold and occasionally platinum. I've been amazed by the fact that new clients have come to us, they've just had their tax done. However when we approach them we say well you can take the silver, that includes book keeping, you can take the gold that includes monthly KPI monitoring and then you can have the platinum on the end as a bang.

You'd be surprised how many people ... They're getting their tax done in Australia like with compliance but they've got a book keeper here and they out source their payroll and it's cost them an x amount. We say hang on we can do all that with the gold package. All of a sudden you've got a 2000 dollar client. It becomes a 10,000 dollar client and you pick up all the efficiency right through the whole way. In terms of bundles, always gives people options and shows them the services you offer. You'll be surprised that previously they could have been a compliance client. All of a sudden they're 5 times that and you're doing monthly meetings. People don't know what they want. You have to tell them what they need.

Jason I went to your conference in North Carolina and it was really good. We've heard you talking about pricing models bronze, silver and gold and all that type of stuff. Do you want to talk little bit about that and especially how people tend to ... in the middle one. They actually do not take your entry product.

We actually don't have pricing bundles. We do price each client individually which takes a lot of time. Our sales processes are very slow and long which is sometimes hard. Like Blake, we do have a big spreadsheet. It's not as detailed into the transactions that we do since we do value priced. We're trying to price, like we're trying to be on the very high end of of our market. We get about 50, 60% of the people that we price which is kind of a good number for us. It helps us to grow at a right pace depending on the team we have to find.

We do, we do have to have a spreadsheet that we use because the spreadsheet is used then by my partner to craft contracts and then scope out work inside of our workflow systems and things like that. I think you do need some kind of tool internally like a spreadsheet. Again the spreadsheet doesn't have prices on it. It is kind of whatever and since I do all the selling and pricing I kind of know just in that initial value conversation which is the first conversation you have with a client. I kind of know where they're going to fall just by listening to them probably in the first 5 minutes and anybody that prices a lot can probably do that. Then you start crafting things around, what they may buy. There's a lot of psychology to pricing like you mentioned Wayne.

If you give 3 options and you kind of know going into about 85% of the people going to pick the middle. It's kind of nice knowing that just as a statistics mind set. You can kind of price that in a way to win for you and for them. Again, very experimental and each one of our clients is totally priced separately from all the others. In a way that's hard but that's also gives us a lot of, it's a lot of, we could do a lot of fun things. We can double our prices overnight if we want to just kind of play with it and see what happens.

Chad do you want to give us any of your feedback and then we're going to go up 2 more questions to go.

I think it's a good opportune to include your clients if you're looking at them in pricing bundle or kind of what we're talking about. Ask your clients what is it that you want in the bundles. Sometimes I remember looking back and we're kind of putting bundles together making decisions kind of in a vacuum thinking that's what they wanted only to learn actually that's not the case. Your having feed back early on the process helps you determine what makes sense at the different levels and how they recommend that.

Okay. I'm going to quickly move on. How did you inform your clients? How did you go out there and tell the clients "Jamie ..." All your clients were on alley and you've got a big client base, how did you go back that process of telling them?

About 5 years ago I basically just went out and visited every client, every A and B and C client face to face. Basically told them about our guarantee. That I needed to change for a host of reasons. Probably in the process, taking what Jason said, probably lost about 5% of the clients. Part of that process too was. I didn't want to ... The firm got to the size where I just physically couldn't answer every email and take every phone call. Over the course of 12months, we went through some rapid change and that was handing over the clients to my client managers. Also part of that was fixing all their fees and explaining what our business model was and why it would benefit them.

I went on sort of 4 or 5 points and I said "this this and this will benefit you however the one thing is we'll fix fee and also 90, 95 % of our fees are paid upfront as well. We really had to sell the whole thing and fixed pricing was just part of that overall offering.

There's a couple little things that the audience might not know about ... In Australia, I don't know if this happens in the US, we rent clients A-B-C-D. That's kind of like a level how much money you're making from the ... I hope that they are potential new fees, D clients are the ones your going to be offloading at the end of the year. Steph Hinds is an expert at getting rid of whole herd D clients each year. At the end of the year and getting a whole new batch of clients and she has a really good process for those. That's really really important.

Just wanted to talk a little bit about that. When you're informing your clients also, one of the things is, what's the benefit to you as well? Because there's 2 benefits here in that positioning conversation. I don't think people are understanding. The small business owner loves fixed fees or value based pricing because all of a sudden they don't get this ticker shock at the end of the year of I have no idea how much its been for the last year. It could be I wrapped up this huge bill and I just don't know. Jamie drill down into some of that a little more about that conversation.

Of informing the clients, yes. In my experience I went to the clients and I said I'm basically changing my business model. the points that I went through was number 1, we're going to schedule all your work. Number 2, we're going to collect all your work upfront before we start it because we're obviously fixed fee. The accountability is on us. The quicker that we can do it, the more money we'll make. Number 3, we're going to fix your fee. Number 4, we're going to have a fast turn around. None of this business about your work being dropped in August and getting done in January. We were going to be at a 3 to 4 week turnaround for 95% of our work. It was just selling it.

Really having the conversation face to face with the client. Particularly existing client. New clients is a no brainer. In 5 years I've never had 1 client even question the model and we ask for payment upfront before we start the job. Existing clients, it's a bit more tricky you've really got to have a good trust in your relationship and they've got to understand where you're coming from. New clients, that are referred to the firm or through your marketing, it's just. It's not even a question. That's just how we do business and they can go up the road as ... and look at our competitors and say well, what's your offer. All time based for you. It depends for how long the job takes or how fast will my work be done? Well it will take 2 months. Do you schedule my work? No just drop it in whenever like so. Its just really selling it. Having clarity about your production, your team and then delivering on that guarantee.

A couple of things here. Just for the audience too to understand it. Jamie Johns is ... His office is in a small regional town. There's only a few accounting firms there. It's pretty easy to when he says walk down the road. You can just walk down the road to the next accounting firm. One of the things is no more cash flow problems straight away. It always surprises me when I see an accounting firms riding off with and have getters in the 90 days like a bizarre concept. I kind of understand that. Does anybody else ...Jason you no longer have debtor issues?

Yes it's required that we draft our clients. You cannot be a client unless we draft our work which is how a lot of pricing firms do it. If you're going ahead and price and you know the price, why not go one step further. Be bold enough to ask for their banking information. Then pull it out of their bank accounts. A lot of firms have figured that out. That's a pretty cool part to dis model. You can actually go as far as making it a requirement which is what we've done and a lot of firms here have done. Jamie did bring up some really important things that when you are implementing pricing it really changes for your existing clients compared to your new client.

You do want to start trying pricing. Doing it with new clients is the way to do it. It's really harder to sell to existing clients. You've got to spend a lot more time and re-change how you've already been pricing them by the hour. You got to re-train them and it just takes a lot of time or you could just fire all of your existing clients and start over. You could do that I guess but then it hurts your cash flow.

Like stop nodding your head on that one.

Kind of rips your cash flow.

We're going over so I'm going to move off the last couple of questions and just quickly wrap up because I want to thank the audience for taking so much time. We've gone over but its just so much great content here. I'm going to go through each of our presenter today and say look if you had a good chance again what would you do differently? This is your chance Jason. If you had your chance again, what would you do differently?

I don't get to go last? I have to go first. I probably would do it sooner. I think in 2008 we started experimenting with value pricing and I probably would have done it a lot sooner. Its just that pricing change. Its transformed everything. It's forced our hand to change every single thing. Even our team  model, how we pay our team. We pay our team a percentage of our revenue. Even our team said why do you pay us hourly if you value price a client, won't you value pay us. I thought good thought so even the team pay is tied directly to the clients pay. That's been an amazing change for us. I probably would do it sooner, that would be the main change I would make.

Jamie, what would you do differently?

Absurdly tome if I had known back then what I know now, I would have been all about the business model. Like most of us we come up to the ranks. We just accept the partner or the previous firm did. In my experience I just would have done it earlier. I think the key to it is to remember 80/20 rule. There's always going to be those exceptions in whatever area. Whether 20%, you'll have to personalize exceptions and still get a success for results.

Wayne you know I work heavily with ... and he's always on to me about. It's not what you do, it's how you do it. The successful firms out there who do it by the hour but they mange client expectations very carefully and I think that's the final point I made. If you're managing your clients expectations and you're in alignment. You cannot go wrong. That's probably the final thing I'd say. Do what's right for you and it's not the what, it's the how.


I think I would have been a lot crueler to my clients when I switched. What I mean by that is that I had a really hard time pricing them high, on high end. What my range would be, I would always and Jason talked about this briefly. He mentioned means what my range would be I would always and Jason talked about this briefly mentioned that he always goes for the high end. I think I have heard him write or talk about this in the past. I really think that's what we ought to do. If we have a low and high price, we should go to the high-price.

We're not doing a disservice sounds we're doing a favor to our selves and to our firms and in the end the clients because we're getting paid what we want to get paid, we're going to do good work for them and they're going to get value out of that. What I did when I first switched clients over is I was nervous about it and so I priced them on the low end. I thought they might not go for it, I didn't want to lose them. I wanted to be nice but it ended up not working out. Those clients who I priced low I ended up not doing such a great doing such a great job on them. A lot of them didn't stick around. We've got to be tough.

That's good. That's a nice way to end that one Chad.

I think what Jamie said earlier, it's all about expectations. We talked a lot about no surprises and if looking back I think I'd have asked help. If you think you might be wanting to move to one of these value, fixed, hybrid models, ask firms that have done it. Ask sooner. Ask for help. We've obviously survived. We either started it with that model or we've converted to that model. Most of us still have hair. We're here to say we did believe it was value in it. It's a matter of asking firms that have done it. I think people are more than happy to help.

Some really good outcomes. Everything I hear and I've been hearing is ... Everybody says do it earlier. At the end of the day you can't create time and the traditional time billing model means you know how much you're going to make this year, next year, the year after for eternity. You might be incrementally increase. The great thing with value, you can create value and it also drives like Blake, wanting to be more efficient, driving new technology back into smarter, faster. One of the things I can recommend too is go to conferences. Go to.... You've got to go to those conferences. Go to Jason's conference. I'm a conference junkie. I will go to a letter opening basically. That's how you learn from your peers. There's so much happening out there in the market place.

Go to these conferences anywhere in the world because you get so much information. Jason you give so much information. The information center. Jason's like Dr. ... baker for a good half day. Which was so valuable. I'm sitting there and it was good because I got to chat to him about my thoughts about the market place and that. It was great information. Go to all those big conferences. That's my big takeaway. I'm going to hand back now to Ian who will just quickly wrap up and talk about the next webinars.

Then also again we may have time for a question or 2 so I'll let you look at the questions. Pull over there Wayne. First let go to the next slide. This wraps up the February webinar series on value pricing. We move into March which is really about practice efficiency and we're going to kick off at March 9th with Intuits firm of the future on maximizing your efficiency across your email, your clients and your team. We're also going to do a panel discussion at the end of march around the top 10 things that efficient firms do. We've got a slew of different articles on how to ultimately get your practice to the next level.

Again if you want to know anything more about KARBON or get a demo or an intro, go to and for Intuit and a lot of the stuff that they've bee putting up. They've been adding a lot of content so just keep checking out their website. Again from the go to the last slide and wait for it ... Again KARBON is a place to collaborate with your team, look at your clients. If you got any questions that came up that the panel didn't answer, you want have answered, you can ask both Wayne and myself. Our emails are up there and Ian@KARBONhq, I'd say pretty much the end of it. I think we've got a couple of minutes here and we've got a couple of remaining questions. Wayne, do you want to feel those or do you want to ... All those out there if you want to ask a few questions more, this is your time to do it.

I wanted to just thank first Jason and Jamie and Blake and Chad, giving up an hour of your time. I understand it. This is our billable time you've given up. Seriously if you haven't been to Jason's event. I do a lot of events and his was awesome because it was just a lot more intimate type event. The speakers had a really good amount of time and also the second, the speaker on that last day, the guy that one of your clients, the gym guy I just though was fabulous.

Still had a big impact. Then I can still would not have thought that April would have a big impact. Nigel thought she was amazing because of ... What's your intention. It's so funny now. Every time I write an email now, I'm always thinking about whats my intention in my email. It's actually interesting so you can get somethings, big points like that.

I've got some questions, Adam Rutridge.

Good to have you on Adam.

One of the metrics you client managers ...

... Client managers are responsible for? Jamie.

Good question. Averagely right? One of the key metrics per job, averagely and also gross profit GP per job.

Cool. James also has ... It seems like Ron Baker goes from clients they use and go from there Jason would you ... Elaborate on that? Goes from client value and goes form there.

I guess what he's saying is when you value price, the first thing you want to do is try to identify what the client values. That's the main thing and you get better at that. Chad mentioned that earlier where as accountants we kind of presumed a lot of times, what they want to buy. A lot of times we can be wrong if we're not careful. In value pricing there's this thing called the value conversation which is the first time you know you meet with the client. That conversation is really all about the client. It's not about you and what you can do. Sometimes we try not to even talk about accounting and taxes just to see if we can get through a conversation where we've only talked about the client.

Just posing really good strong deep questions about where they want to be in 2 years. Help them unlock new thinking about what they want to become or what they think they could be if they had the right financial partner. When you unlock all those things, what you're doing is you're hearing a lot of things you can price. A lot of times we'll hear something new and we'll actually make up a consulting engagement and we'll sell it for 7500 bucks. They buy it. You're like that's kind of cool but you had to unlock what they value. You just created value that has a price attached to it in the middle of thin air but you have to understand ...

One of the things ... Jason hits the nail on the head and it's something that is ... When you're doing what I call ... When I'm meeting a client, its a discovery meeting. Always has been. I call it a discovery meeting and then the golden rule is you've got 2 ears, 1 mouth. Shut up ... Questions and at the end of the meeting you should be recording your time. How much did the client talk? And how much did you talk? After clients, you've talked more than client you've lost that sale. If the clients talk more than you, you've got half a chance of getting that sale.

Your now listening a actively listening to the client, throwing back questions to them. Then you've got an understanding and the client goes "oh that person really got me, really understands everything about my business" it is Jason Allen head and it's something trial that is when you're doing what I call you when I'm eating at every meeting twice as I could think about what I was doing on the weekend but ...

30/70 Wayne. Talk 30% ...

I like that part. I'm going to steal that one. Chad thank you for that. We'll just go back to you Jason . James has got one more question. Do you change the documentation each time, at certain intervals?

For the proposal maybe?

No. This is an ongoing work. If you've got ongoing work, have you match change orders? Do you do that at the time of the change or do you do a summary charge at a certain time break or time interval at the end?

That's good. One thing all these firms probably know is when you price is upfront you have to be really good with documenting your scope and contracting that and then managing the scope in a big way. That's like a whole other position in your firm that you don't realize you need until you do it. A project manager basically. There's a lot of training ant teaching to your team to make sure they're not doing work out side of the scope of the originally agreed to contract and price. That's a big deal to manage.

If they come up with something they want that's not in the contract, our team's pretty good about asking me like "did we price for that?" Then we'll just form an addendum to their contract with an additional price. That pricing is not as hard as the first one. There already a client we can figure that out of an email typically. Where as the first client we always present those in person every time to a new client. Yes, you got to manage scope. More than you did when you were hourly billing big time.

You can't get scope ... We could talk for hours on this I know. This is a whole conversation too about how you actually present this to clients. The worst thing you could ever do is to go and do this in front of any board room. That's the worst way to present to a client because it's confrontational. They're on one side your on the other side. It feels like it's a deposition. Go out and have a coffee. Sit side by side. The golden rule entails, always sit side by side next to the client. Don't sit opposite. Tons of these things. We can give you lots of these later. Make sure you visit the KARBON website and look for all the other events that we've got. Register for a preview and also I'd like to finish up with, I want to again thank my guests. So much insight here. Thank you so much.

Again I appreciate Chad, Blake, Jamie, Jason. Full hour. Appreciate all the insights that you guys are able to give and hopefully you guys had a lot of fun along the way. We did and just wanted to say thank you from KARBON. Thank you from Intuit Firm of the future. Appreciate it guys.