As an accountant or bookkeeper, you see the majority of your clients between February and April of each year. No doubt, you'll be doing a lot of work during these three months. On the bright side, with advances in accounting software with features such as automated reports and bank feed integration, you're now getting the job done more efficiently than ever before. However, this efficiency is left unrecognized by your clients that continue to be billed by the hour. Instead of relying on the same hourly billing methods as before, accounting professionals (like you!) should take the time during tax season when you're able to see most all of your clients face-to-face and talk with them about how value pricing is mutually beneficial for both you and your clients.
What is value pricing?
Value pricing is a concept where the worth of a specific service is based on its end result. In simple terms, you pay for what you're promised . . . nothing more, nothing less. This outcome is determined by a number of factors, including client satisfaction, quality, and customer demand. Value pricing is completely different from hourly billing, which is based on the idea that the price of a service is determined simply by the amount of labor involved.
Value pricing, essentially, assures a certain level of quality and puts power in the hands of your clients. They'll know they're getting the exact service they've paid for. Meanwhile, you won't lose out when completing difficult work in less time than before.
Bringing the idea to clients
Customers may resist the idea of value pricing at first. After all, hourly billing has served them well in the past. It's a reliable method with straightforward expectations, and clients have a clear understanding of their bill. Also, they'll consider tax season a hectic period to enact change. Yet value pricing creates mutually beneficial relationships between you and your clients. This way, both parties leave feeling good about the situation. Clients know they're getting the service they pay for, and you know their work is respected.
When proposing a value-based structure to clients, it all starts with a conversation. During this initial conversation, take the time to understand your client's needs and what your client expects to see during tax season and the rest of the year. Keep in mind that moving your services beyond tax season and showing your value throughout the entire year is of major importance during this conversation . . . you are in essence making the move from tax time to all the time. You can ask questions relating to your client's growth plans, business operations, and service standards.
Another part of this discussion should be around detailing your experience which, in turn, amplifies your value in your client's eyes. You also need to define a clear scope of work so the client knows what to expect from you. Giving your client the assurance that quality is a priority in the new pricing scheme is also something that should be conveyed during this conversation.
After you've learned more of what the client expects from you while also "blowing your own horn" a bit by outlining your experience and value, you should then ask your client what price he or she is willing to pay for an optimal experience. From there, you can work out a favorable price for all and be on your way to a happier and more satisfied client. Keep in mind that value pricing is equal parts service and customer expectations. Keeping this in mind can always help you create a pricing scheme satisfying for all parties.
