Effective Pricing for Accountants by Mark Wickersham

Effective Pricing for Accountants by Mark...

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I have been working on the pricing of my practice for some time now and we have advanced quite a long way in ensuring that we have a client base that values or services and is profitable.

I recently purchased Mark Wickersham's new book Effective Pricing for Accountants (had to wait a week as it had sold out on Amazon).  I finished my first read (will be using the book to improve results overtime)  last week and would strongly recommend it to any accountant or tax advisor who is serious about obtaining first class financial results by offering their clients a first class and professional service.

After just 3 client meetings the initial results are GRF increases of 42%, including one client whose open remarking is normally along the lines of "you're not planning to put up your fees this year, are you"?.  This year I replied no, but I will allow you to if you wish!  After an hour meeting he did just that - increased his fee by 58% and appeared as happy as I have ever seen him.  The only difference between this and prior years is that he feels that he has purchased the services and additional services that he wants and presumably can see a value to.

Must read is an overused tag with business books, but in the case of Effective Pricing for Accountants it is true.  Possibly the best investment that I have made in many years.

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FT
By FirstTab
05th Jun 2011 15:53

Thanks for the tip

Thanks for the comemnts on the book. I tried to get the Kindle version- not availabe, I was disappointed. Further there was request from AW for somone to read AW's free copy and comment. I applied.  AW were not polite enough to let me know that someone else has been allocated the book. I was waiting for the free copy. Not happy with Robert or whoever is responsible for this area. Let people know thanks but no thanks AW!

I will now order the hard copy version from Amazon and post a blog on it once I have finished reading.

 

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By zarathustra
05th Jun 2011 17:27

What extra did he ask for ?

Hi Bobhurn, I'm interested in what extras he asked for that he was willing to increase his spend by 58% ?

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By Robert Hurn
05th Jun 2011 17:57

Extras

The extra's were relatively simply from our workload point of view, being: Quarterly Profit & Loss figures (Sage P/L was acceptable - we already undertake the bookkeeping), a quarterly meeting to discuss results.  We are to measure the results of his price increases Vs. historical pricing and email a simple spreadsheet report.  Introduced him to another client to set up and control a Google Adwords campaign and budget, paid for by him directly to the IT client.

He has decided to run with a price increase across the board and in the first six weeks we will report weekly to him to ensure that the price strategy is not backfiring. 

Basically the additional services are for us to help him increase his profitability in addition to the normal compliance work.  I have put in place a guarantee, that our fee increase will not prove to be more than 50% of the profit increase achieved, therefore he can't lose.  I could, but I am confident that we will exceed our target. The additional time involved is very little, but the benefit to the client is what he is paying for.  He would be happy if I charged him £1,000 for 30 seconds work, if that work resulted in higher profits, after allowing for the fee.  He is buying increased profits not my time.

Too early for the first week's results but a call from the client on Friday indicated that he was meeting very little price resistance.  In my view he had made the mistake of simply copying (and often undercutting) others in his industry.  If you copy others you are highly likely to experience the same results.  This chap offers a high quality service

(I know this from personal use) and is now, finally, valuing himself at a more realistic rate.

 

 

 

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By cymraeg_draig
05th Jun 2011 18:14

Whats new ?

The extra's were relatively simply from our workload point of view, being: Quarterly Profit & Loss figures (Sage P/L was acceptable - we already undertake the bookkeeping), a quarterly meeting to discuss results. We are to measure the results of his price increases Vs. historical pricing and email a simple spreadsheet report.

 

 

 

 

Posted by bobhurn on Sun, 05/06/2011 - 17:57

 

 

Isn't providing suitable management information (tailored to size/type of client, etc) something we all do anyway?  

 

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By Robert Hurn
05th Jun 2011 18:26

Hi WD

Yes WD I agree with you.

But in this any many other cases we have found that clients are simply not acting upon the information that they receive.  In this case what's new is that we have convinced the client to do something about the low levels of profit that he has recorded. And introduced marketing systems that he can follow within a controlled budget and a guarantee that if we fail to achieve our targets he doesn't pay us for the stratergy.

Time will tell how well we do with this and other clients.  In my view many small busiensses have no idea how to market themselves other than copying others in their industry.  I am hopeful that we can help in this area, but will be monitoring our results for clients carefully.  After all if he is paying for a benefit we must ensure that we deliver that benefit and more.

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By cymraeg_draig
05th Jun 2011 19:17

New or repackaged ?

 

Ok - I see your point, but I'm still struggling to see what's actually "new" about it.  Surely this book has simply "reminded" you to go back to what you were probably doing anyway when you first started out - before you became cynical about clients like the rest of us.

Yes - I have a natural aversion to anything remotly resembling "selling" (door to door salesmen paint black crosses outside my gate to warn other salesmen not to call)  or anyone claiming to be some kind of "guru".  What I find with these books is that they contain nothing new, they simply repackage what you were probably doing anyway, or, remind you to try doing what yiou gave up on because no one took a blind bit of notice the last time you did it.

One thing we should all bear in mind of course, is that the whole business climate has changed in the last couple of years (thanks a lot Gordon) and clients can no longer just bumble along and still make a living.

 

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By Robert Hurn
05th Jun 2011 19:40

Agree

One thing we should all bear in mind of course, is that the whole business climate has changed in the last couple of years (thanks a lot Gordon) and clients can no longer just bumble along and still make a living. -WD

I think your last point above has hit the nail on the head, for 10 years or so most anyone could make a good living and I think as accountants we may have become complacent.  You may well be right that books tend to remind us what we already knew but haven't been doing.  It's early days but it will be interesting to see how those clients that we offer marketing advice and support to perform.  I am ready to sprinkle salt and pepper on my hat if required :)

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By Bob Harper
05th Jun 2011 21:39

Great work

@Bob - great work...marketing management and pricing consulting is a killer proposition.

Are you the same Bob Hurn as in Reading?

Bob Harper

Portfolio Marketing for Accountants

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By cymraeg_draig
05th Jun 2011 22:54

.

It's early days but it will be interesting to see how those clients that we offer marketing advice and support to perform. I am ready to sprinkle salt and pepper on my hat if required :)

 

Posted by bobhurn on Sun, 05/06/2011 - 19:40

 

The "secret" is selecting the right clients. I dont know what your client mix is, but some businesses cant do much about the numbers of customers, others would commit suicide by raising prices.

One example we have had over the last few years is a freehold public house which must be one of the few that is actually growing despite smoking bans etc. The secret, a micro brewery built next to the pub (and now undergoing it's third expansion) plus the services of a retired master brewer.   

The beer is miles better than the mass produced rubbish sold by the big breweries.It has no chemical additives.Several varieties are always available. There are no hangovers the next day despite the fact that after 2 or 3 pints you lose control of your legs :) And from a business point of view, after taxes etc it can be sold at 50p a pint less that bought in beers (which keeps customers happy), and, every pint makes about 50p a pint extra profit compared to bought in beers (which keeps the publican happy).  The pub is now in the CAMRA guides and has won numerous awards for its beers - which brings in lots of extra customers.

So yes, some businesses can benefit from advice, but I'd like to think that we would be giving that advice anyway, without a saleswman or "guru" telling us to.

 

 

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By Robert Hurn
06th Jun 2011 08:38

Guilty as charged

Yes I am the Bob Hurn in Reading

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By Robert Hurn
06th Jun 2011 08:40

Perfectly Put WD

In fact I am so keen to serve my clients that I intend to visit a number of local public houses to test your comments. The advice I give may well be better after a few beers :) Seriously I think you are spot on if any business can supply a premium product and service it will thrive in most any environment

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By justsotax
06th Jun 2011 11:33

...new or not?

I have to agree with CD to an extent, as an excited new entry into the self employment market this is exactly what I intended to provide, not only the basic compliance services but also other tools of the trade that if used correctly (or used at all) will help a business grow.  The key is identifying those businesses who will not only be able to afford should additional servces but who will benefit from the use.

I have attended AVN seminars and listened to Mark Wickersham regarding such things - it isn't anything new...however it does seem that there are a surprising number of practices that don't try to identify additional services particular clients would benefit, so these kind of books are a very useful reminder.

That said this is very different from simply 'cross selling' anything that moves to any clients.

 

 

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By Paul Scholes
06th Jun 2011 15:53

It is rocket science to many

I agree with CD and others that the books on (& ethos of) providing more to clients than they might have expected might just be a repackaging of what others see as routine work but if you've never been trained in or experienced first hand all that's needed to run a business then such publications might be just what is needed to spark a change in approach.

As it happens, tax, accounts and auditing, began to bore me about 20 years ago (I'm surprised I lasted that long) and so I was always on the look out for more fulfilling work and so running my own practices and helping clients run their businesses has made the job bearable.

Where I fall out with the marketing of the books and ethos is the way in which the prime motive for doing it is to make more money out of clients.  Of course, as in the example above, if there scope for additional work, you are capable of doing it and the client see's the benefit in it then yes you will make more money but that may not always foollow.  By helping a client run their business more sucessfully you might recognise that they are not using you to their best advantage and this could reduce your fee income. 

Finally there's a point at which you might recognise that just making more money may not be in your best interest (no holidays & 60 hour weeks) and so by providing more valuable services and offloading others you can make the same money, for less work.

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