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Getting the price right

12th Feb 2014
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The trouble is, you either go too high or too low! At least, that's how it looks to me.

Finishing off the bills for January's tax return filing mayhem, there were one or two where my instinct said there would be trouble billing that much. Time will tell, and I'll add a postscript later if and when I get the phone calls! After a while we know which clients will be reasonable, and those who think their bill should always be less than the previous year - and even if it is, will still complain that it's too much. And they're not all farmers.

But I'd rather have a few complaints - a lack of complaints usually means that some clients are complaining to their friends behind our backs and looking for a new accountant. Occasionally we lose clients - apparently because of fees - to firms which we KNOW are more expensive than us. I'm often tempted to make a note in my diary and send them a fee quote a year later just so they can see how much moving has cost them - but I'm not that petty (maybe I am in my head, just not in real life!). Of course, maybe their new accountant has persuaded them to buy more and pay more for it. Well done them.

In the meantime, I seem to be getting ever more invitations to quote for new work, but so far this year I seem to have had very little success. In one case I sent a proposal to a prospect and found that I had quoted his father for the same company in 2005 - and the price then was only £50 less than I am quoting today! In retrospect I'm not surprised I didn't get the job back then, but I'll be very disappointed not to win it this time. If I don't, it certainly won't be on price.

The knack is to spot which prospects are most sensitive to price, and which are genuinely looking for the quality of services ahead of the price. Assume it's the former, and some prospects will think you're too cheap. Offer them a stripped down, basic service at a reasonable price and some will take that to mean that you can't offer them the range of services they might need, either now or in future. Assume that service is more important than price, and some clients will think the firm is too big and won't be interested in them.

That's the trouble, there was no pricing module in the ICAEW exams when I took them, no-one ever taught me how to price and quote for new work. You just work on trial and error.

One approach that has worked well for me is the 'get straight to the point' approach. After the initial chat, I just summarise what I believe they want and simply ask the prospect how much they want to pay. It saves a lot of time! 

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By peterdell
13th Feb 2014 17:46

Thanks for the advice at the bottom, think I will try that in future to get rid of the timewasters

Twice this week I have had supposedly new business calls basically looking for free advice. Another wanted to pay £600 for a full Ltd accountancy service (I suspect he wanted to find out the deficiencies of his own accountant). The fact he was hugely over paying tax made me laugh. Quick calculation I would have to run 75 companies to make £45k before costs. I sent him away with a flea in his ear.

Some folks just don't get it, if you want advice you have to pay for it. You don't go into Tesco's and walk out with free groceries. Why would accountants give away our value for nothing.

Anyway I have pricing model so it would  also save the hassle of inadvertently helping someone who has no intention of being your client.

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By paulb
07th Mar 2014 12:06


I quoted two jobs last week (and won them) both based on service. In each case I was more expensive than the previous accountant. However it was more than clear that service was the driving factor. I am happy with the fee and therefore I will be happy when they email me on Boxing Day asking if they pay VAT on stamps!  :).

I am fed up quoting peanuts and then resenting every time they call me. I have taken free telephone advice off my website and now I only take a quick chat over the phone & it is explained it may be charged if it goes any further.

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