Traditionally, accountants and bookkeepers have always charged based on an hourly rate. With this model, you benefit when taking longer on a job, but this doesn’t make sense if you come with years of experience and heaps of efficient methods to tackle your clients’ tasks.
If you’re sick of tracking your hours on timesheets, then it’s time to consider switching to value pricing.
We sat down with one of our superstar QuickBooks® partners, Marnie Stretch, who is a CPB based in St. Albert, Alberta. Stretch is also an alumni of the Black Swan program, which is run through the IPBC and taught by value pricing guru Ron Baker. Stretch gave us some amazing insights about how adjusting her pricing has transformed her business.
Stretch switched her pricing model after hearing Ron Baker speak about it three years ago. Since then, she’s acquired a greater ability to make money, as well as an easier way to work within QuickBooks Online, which will become valuable as more information is stored in the cloud. There’s no turning back to the old days of hourly billing for Stretch.
But what is value pricing? “It takes that flat rate pricing to a higher level where you’re working at pricing the customer and not the service,” says Stretch. In a nutshell, you set your service fees and prices based on the customer’s needs and budget, rather than simply deciding on the value of the service itself.
The magic of value pricing is that it lets you take the role of a professional advisor. Your wealth of knowledge and expertise, service guarantee and flat rates are all parts of your service that are included in your pricing proposals. It’s no longer about the rate you make, but rather the value you provide. If they see you as too expensive, then it might not be a good fit for both parties involved, says Stretch.
The key to value pricing is to treat it as an art; don’t strive for perfection, but always look for ways to improve as you do it, she says.
For those just getting started, keep Stretch’s words of wisdom in mind:
- Read Ron Baker’s book on value pricing. No one says you have to go at this alone. Stretch recommends all bookkeepers and accountants read Implementing Value Pricing: A Radical Business Model for Professional Firms. The ultimate reference tool in value pricing, Stretch uses it to help assist her in answering any questions that pop up about value pricing.
- Offer 3 pricing options in proposals. This gives the customer the power to choose. Offering three options is a far better model than the take it or leave it approach. The great thing about options is you’re empowering your customer to make the choice. And if they can only afford the lowest package, you can always work towards moving them up in the future.
- Strive to go beyond email when sending proposals. In an ideal world, you’ll be able to present your three pricing options in person. If that isn’t possible, get on the phone with your potential customer while they look over the emailed proposal so you can nip any questions or concerns in the bud. This also gives you another opportunity to further communicate your value.
If we’ve piqued your interest on value pricing, hear more about it from Ron Baker himself at our upcoming Intuit® Thrive Conference. This three-day event, starting on November 10, will bring together professionals from across the country to discuss the latest trends in our field and how to tackle these new challenges. Buy your tickets today!