Are your cleanup projects highly profitable? Or are they loss leaders where you make up the profits after you enroll your client into a monthly service?
Dedicated accounting professionals work long days. The majority continue to charge an hourly rate for cleanups because it’s the easiest approach. You track time and then send invoices. When you bill for your time, you don’t need to thoroughly analyze the cleanup project beforehand. This removes any worry about changes in the project’s scope.
Keeping the final cost open-ended benefits you. But how about your client? Everyone’s in the dark about the final price until the job’s complete. As a result, the fee on the final invoice may raise objections.
The Value of Your Work
As you gain expertise, an hourly rate can greatly reduce your revenues.
That’s because your time isn’t your highest value. Clients choose you over the competition because of your skill set and knowledge. Your expertise in getting their books up to date has greater value than the time you spend on the projects.
Clients invest in outcomes. Therefore, the value lies in determining why your clients want a clean set of books. What’s the urgency, and why now?
If you want to earn more without any additional time spent working, then connect your fees to results instead of time. They agree to a set price and you don’t have to worry about tracking time. It’s a win-win for you and your client.
Delight New Clients During Your Initial Consults
If you’ve been curious about pricing for value rather than time, it starts with your initial consult.
You meet a potential client for the first time. Think about any network event you attended where the other person told you about her entire career path. Then she pressed a business card into your hand and moved on. This person asked you one question about yourself and then quickly returned to her pitch. She didn’t notice your eyes glaze over or your desperation to quickly disengage from the conversation.
Most initial consultations share similarities to the trapped network conversation. The questions you ask focus on gathering details such as bank accounts, transactions, credit cards, and so forth, and quickly assessing the books. From the client’s perspective, questions about the details aren’t memorable.
Remember, long-lasting impressions occur during the first meeting. Technical questions position you as a technician. Your full value, however, extends far beyond your technical skill set.
Instead of focusing on the details needed for the project, alter your approach. Dedicate this first conversation to discovering your prospect’s challenges, limitations and goals. If you decide you want to work with this client, enroll her into a paid diagnostic assessment.
Get Paid to Assess the Books
A speedy assessment during the consult leads to headaches later. You bump up against more complications than you anticipate when you dive into cleanup projects too quickly. Under those circumstances, your profit margin falls as your stress increases.
Enrolling new clients into a paid diagnostic assessment prevents your cleanup projects from turning into nightmares. The paid assessment is the ideal time to gather transactional details, gain access to the various accounts and fully scan the books. You’re now paid for something you originally gave away for free.
Don’t Get Caught Off Guard
Some clients will question the fee for the diagnostic assessment. Don’t let the questions throw you off guard. Like anything, preparation and practice get better results than winging it.
- Concentrate on the value of a paid diagnostic assessment.
- Create a list of the top five questions prospective clients will ask.
- Consider how to respond to any questions or concerns.
Educate clients about the benefits of a paid diagnostic. Carve out time to write your responses to the most common objections. Then, rehearse the soundbites. Remember, preparation and practice are key.
Follow these five steps to enroll new clients into a diagnostic assessment.
- Benefits. A thorough assessment removes surprises.
- Scope. You fully review the scope of the project with your client.
- Value. Emphasize how accurate financials impact her business.
- Price. The project has a set price.
- Payment. Get paid prior to starting the project.
Price sensitive clients rarely pay for a diagnostic assessment. They expect it to be free of charge.
This first step to working with you pre-qualifies clients. You primarily enroll high value clients who aren’t price sensitive. This advance move emphasizes your expertise instead of your technical skills.
Be Ready to Reference Prior Success Stories
New clients who have had a previous bookkeeper may hesitate to come on board with you. Don’t take it personally. They seek assurance that you will deliver on your promises.
Testimonials do the trick. Instead of bragging about your accounting services, let your clients share glowing reviews. Post them on your website, social media and your QuickBooks ProAdvisor Profile. When you provide specific details about prior success stories, your prospective clients envision those same results for their own accounting projects.
Don’t Let Competitors’ Pricing Shape Your Rates
Don’t let the competition’s rates influence your accounting firm’s pricing. After all, the value you and your team provide is not exactly the same as that offered by competing accounting firms. If your rates reflect those of the competition as opposed to your unique value, you will undercut your own business in an attempt to keep your pricing competitive.
Instead, shift the focus to the value you and your team provide. Price your cleanup projects and other accounting services in accordance with your firm’s unique value. Communicate the value to prospective clients during your initial consultation and stand by your fees, even if they are comparably high.
Seize the Opportunity to Begin Value Pricing Your Services Today
Do not spend one more day pricing by the hour. This leaves money on the table. Start pricing your cleanup projects with an emphasis on value.
As a result, you’ll enjoy working with ideal clients and increase your bottom line. Clients who prioritize value over price will not hesitate to pay for a diagnostic assessment. Claim your free resource and your accounting firm will attract high value clients who happily pay your fees.