How to Price Your Advisory Services:
A Strategic Guide to Maximizing Profits and Client Value
The number of accounting firms offering advisory services is steadily rising. Firms of all sizes are realizing the benefits of pairing advisory with compliance services.
The ROI on this combination can skyrocket your firm’s profit margin. Value pricing is ideally suited for Client Advisory Services (CAS). Unlike the traditional hourly rate or fixed fee, which emphasizes time and costs, value pricing highlights your expertise.
Value pricing, essentially, focuses on solutions and results. The straightforward math equation of calculating time by an hourly rate doesn’t apply. So, the switch to value pricing feels awkward and raises some questions.
- Clients will leave if I raise their fees.
- No one else charges higher rates.
- I haven’t offered consulting long enough.
- Clients where I live won’t pay more.
- They’ll expect more from me.
Since value is subjective, you want to consider the client’s perspective.
Ask yourself how clients benefit from advisory services.
- How do financial insights and guidance impact your clients’ financial health?
- How do advisory sessions affect efficiency and processes within a client’s business?
Why does this matter? Because clients invest in solutions. It’s your job to teach clients about how their decision making improves when they apply the numbers.
Quality or Quantity?
Consider the range of prices a firm can charge for its services. Basically, low hourly rates or fixed fees require more clients. It’s a factory-style model that is transactional. Firms that charge low fees don’t have the capacity to work closely with their clients.
Client-centered firms, which charge premium fees, are at the opposite end of the spectrum. Firms who value price their services don’t require as many clients to meet their revenue needs. As a result, they engage clients who prioritize the relationship and quality of service. Firms at this end of the pricing spectrum have the capacity to offer client advisory services.
Where does your firm currently lie on the spectrum? Factory style? Client-centered? If you’re serious about CAS services, then value pricing is your firm’s best option.
Invest in the Relationship
Raising rates without a plan is sure to backfire. What you say, and how you deliver the message, is critical. Set time aside to carefully lay out your plan first.
A solid strategy considers how to successfully raise rates, minimize pushback and retain clients. Especially if you intend to significantly increase client fees beyond the traditional 5% to 10%.
The client relationship matters. If you haven’t nurtured the client relationship, then consider doing that before you start to increase fees. Client-centered firms can expect 82% to 100% of their clients to convert to the new rates.
Clients who engage your services consider three specific criteria.
- Client relationship. Your quality clients don’t want to be a transaction since it’s highly impersonal. Knowing your firm cares about them and looking out for their best interests is something they value. List two or three qualities that your clients appreciate most about your firm.
- Service delivery. Trust deeply matters. Clients need to believe you possess the skill set, expertise and tools to deliver what they hire your firm to do. And, that the deliverables will be available in a timely manner.
- Price. Your clients want the best quality they can afford that’s within their budget. The only clients who prioritize price are price-sensitive clients.
It’s your job to educate clients about the value. Discover your clients’ priorities and goals. Then share about how your firm can assist them. This raises your perceived value.
Here’s the bottom line – clients need to believe the benefits of engaging your firm are greater than the fees you charge them.
5 Steps to Raise Rates with Current Clients
Client Relationship Building
Building and maintaining strong client relationships is essential in the accounting profession. Business coaches offer guidance on effective communication, client retention strategies, and how to exceed client expectations. This can lead to increased referrals and long-term success. Business coaches can provide insightful advice on how to build valuable relationships. Relationship building is super important as a business connection could one day turn into a partner or a useful resource. Business coaches often have extensive networks in various industries. These networks can help bookkeepers land potential clients, and meet potential partners, and collaborators. Networking can open doors to new business opportunities and professional growth. This can further enable bookkeepers to grow their business and continue to expand.
Now’s the time to raise the rates of your current clients. It’s something you’ve considered. But, you’re unsure about what to do.
By following a proven process, you can expect 82% to 100% of your clients to convert to your new rates. It’s realistic to expect some attrition. Often, it’s the price-sensitive and headache clients who decide to go somewhere else.
Let’s dive into the 5 steps to raise rates with current clients.
1. Communicate. How do you want to tell your clients about your rate change? Most of my clients opt to send an email instead of mailing a letter. Essentially, the email explains that your firm is making some operational changes and you want to meet with them. Don’t make the mistake of justifying a rate increase because of increased expenses. This is true for everyone.
2. Calendar. Get a client meeting on the calendar. Either have a team member schedule the meeting or you can do this yourself.
3. Conversation. During the client meeting, focus on your client. First, ask great questions to determine what your client wants to achieve and how it fits into the big picture. Some common priorities include:
I like to discuss what my clients want to achieve during the next 12 months and why those goals matters.
Next, educate your client about how you can help to achieve that result.
4. Objections. As you know, people don’t like change. Don’t let any objections throw you off. Rather than view it as confrontation, get curious.
By the way, it’s easier to respond when you prepare beforehand. Consider the top three to five objections. Then, ask questions to discover what’s behind the objection (even if it appears obvious). You’ll gain insight into the story behind the objection.
5. Payment. Don’t skip over the payment part. Share all relevant details regarding new fees, how your firm processes the payment and start date for the new fees. Let clients know whether they will pay prior to doing the work (which is my preference) or receive an invoice after the work’s complete.
Start to Raise Your Rates Today
Now’s the ideal time to finally raise rates with current clients. Open your calendar to carve out the time to do this. If this is new for you, then it’s natural to have questions.
You won’t feel confident at first. Similar to most new things, there’s a learning curve. Expect to gain insights with each conversation. Then, adjust your approach accordingly.
Follow the 5 steps of the Raise Your Rates Formula to get current clients up to your new fees – without pushback. What’s your style? Are you a self-starter who will do this on your own? Or, do you prefer to have someone guide you through the process?
As a firm owner, you deserve to engage high quality clients who respect you and appreciate your firm’s services. When you raise rates with current clients, you earn more without adding to your workload. It’s an upleveling move for your firm.