It's common knowledge that our perception of the value or quality of a product or service diminishes as the price goes down. Conversely, the higher the price, the higher the perception of value or quality.
So how do our clients perceive our value when we give it away?
I see far too many accountants giving value away for free. The worst thing is, more often than not, SME clients aren't even aware they've received any additional value. Accountants have a bad habit of bundling the added value into the compliance fee, usually justified by 'our clients expect this from us' or 'they wouldn't pay extra for this.'
Consider the risks of bundling services into the annual accounting fee:
1. How much quality time do you dedicate to executing a value-add service perfectly for the client when you're doing it for free?
2. If your client isn't aware of the value you've added, they get no opportunity to choose if they even want the service from you.
3. How difficult is it to sell something to a client after you've already done the work? This can damage your client's trust as you've assumed the sale, and so you reduce your price or just give it away.
4. This approach makes the price conversation about how long the project took. Time taken is irrelevant in terms of value; if your plane trip to Hawaii takes two hours longer than scheduled do you pay more? No, because the value is the same.
2. If your client isn't aware of the value you've added, they get no opportunity to choose if they even want the service from you.
3. How difficult is it to sell something to a client after you've already done the work? This can damage your client's trust as you've assumed the sale, and so you reduce your price or just give it away.
4. This approach makes the price conversation about how long the project took. Time taken is irrelevant in terms of value; if your plane trip to Hawaii takes two hours longer than scheduled do you pay more? No, because the value is the same.
The alternative approach your clients will thank you for:
1. Before you offer any additional value, be certain that the benefit outweighs the 'cost' to your client. Otherwise you are just product pushing.
2. Before you start the work, STOP and tell your client what you are considering doing for them.
3. Articulate the value of the service for your client. For example, will it save them time, improve their cashflow, or reduce their tax or stress levels?
4. Ask your client what benefits (value) they see in the service you're offering. This ensures that they fully understand and appreciate what you're offering.
5. Discuss the consequences of not doing the proposed work. Come from a place of caring - you want better outcomes for your client and they trust you to provide this.
6. Give your client some options as to how this value can be achieved. The options should have increasing levels of value (and price).
7. State your price and shut up. Your client will then either accept or they'll give you an objection.
8. If they object, revisit the value to be gained and the consequences of inaction. Ask again if they see the value of one of the options.
9. Document what you've agreed. The chosen option, the value to be gained and the price - and get the proposal signed off by your client.
2. Before you start the work, STOP and tell your client what you are considering doing for them.
3. Articulate the value of the service for your client. For example, will it save them time, improve their cashflow, or reduce their tax or stress levels?
4. Ask your client what benefits (value) they see in the service you're offering. This ensures that they fully understand and appreciate what you're offering.
5. Discuss the consequences of not doing the proposed work. Come from a place of caring - you want better outcomes for your client and they trust you to provide this.
6. Give your client some options as to how this value can be achieved. The options should have increasing levels of value (and price).
7. State your price and shut up. Your client will then either accept or they'll give you an objection.
8. If they object, revisit the value to be gained and the consequences of inaction. Ask again if they see the value of one of the options.
9. Document what you've agreed. The chosen option, the value to be gained and the price - and get the proposal signed off by your client.
By following this process, you'll build client trust and provide much greater value. Your reward will be increased sales, less write offs, happier clients and a more engaged team.
How much money would you make if you stopped haemorrhaging value?
Winter is a busy season providing many opportunities for you to have these client conversations. Consider how much more money you would make if you stopped giving away value. More importantly, how much extra value could you deliver if you charged separately and committed to delivering an exceptional service?