Special Offers
For some time I have offered a discount to clients - new and old - who let me have their accounts and tax return information before 30 September. It has attracted about six new clients a year and considerably improved workflow on existing clients
Is that because you become too cheap?
I don't know how successful discounts and promotions have been for others, but I know they can work if used correctly.
The problem is that you almost always get someone looking for the lowest price possible, which is not what we want.
6 clients a year by offering a discount for bringing books in early sounds a lot - do you think you might be giving them too much discount?
Think twice and then again
@Emma - use promotions, but rather than just knocking money off add value and consider doing both - 25% off in the first year and a free CashBuilder Review worth £750.
Low prices are no problem, provided the client plays by the (your) rules. Clients that want low fees need to understand/accept that they are part of a high volume business model. So, they have to be happy to do what you say. Things like paying by DD and perfect bookkeeping.
Rather than a USP, where the “S” stands for selling, think about UVP where the “V” stands for value and focus on developing a unique market position. This will make you different to the competition.
Don’t just focus on the cost of acquiring a new client in the first year. There is lifetime value and referrals.
Bob Harper
Discounts attract disloyal customers. Always offer something ex
Nobody really believes a discount unless they have to do something significant to earn it. They always think you have set your prices articfically high to give you room to discount. You are also 'training' your clients to expect a discount so if you can afford it this year, why not next. You are also attracting people who are entirely price driven. As soon as somebody else comes along with another deal they will be off to them.
Please offer them extra services or products as a reward for signing up. These extra services may actually cost you less than the discount to provide and will be far more memorable. For example, offer all new clients one years insurance agaianst the cost of a tax inspection. You can buy this cheaply and they think it costs a lot. It shows that you care about their peace of mind. You could also offer free credit checking software or oinline subscription for one year. How about allowing them access to their accounts over the internet. Life insurance etc. etc.
Please avoid discounts.
Mixed views and I think it depends on the rest of the marketing
Some of the points raised here I can agree with from experience of promoting them by phone.
If the most prominent message is money off especially as a percentage then people think "so what" and I can tell you with hand on heart that verbal responses are "that means nothing to me as I don't know what the normal rate is".
People will tend to judge fees according to what they are currently paying so messages around "20% off" can be very damaging if it works out that you are more costly than the current price and the value is not articulated as others have said.
The free sessions are also standard and people still have to have a good reason to give up their time.
The main barrier to overcome if you are wanting to attract people away from their existing accountant is loyalty and trust. Over the years I have come across many examples of shoddy service yet people still stay with their accountants because of the "devil you know" mentality. So, if you can tap into this in some way by offering a piece of work, workshop, seminar, information, whatever, at a low cost or special price then it presents the opportunity to get to know you, like you, trust you and then when a review comes around or an event or trigger happens then you are the obvious choice. Sometimes it's just a drip feed of education and awareness that helps. Email newsletters can be great for this reason as people opt in to receive these whilst they are still with their existing accountant but use the opportunity to raise more questions, compare service levels, value for money, personality, processes and software etc.
However... I disagree with the blanket statement that money off attracts disloyal clients as sometimes and depending on the rest of the marketing efforts and the approaches being made, it can act as a huge trigger to do something now. This helps those people who are professional, profitable, but comfortable with their accountants to be compelled to act right away rather than wait for another year end to pass by.
Just another little point and that is that I have worked with a lot of sole practitioners and small firms over the years and the pattern that I would say appears sometimes is where money off promotions are used because they are uncomfortable or believe they cannot afford other marketing activity. These people kick themselves a year or two years down the line as they get more experienced with other marketing methods that work for them and become more comfortable with things. They are also in a bit of a trap where for one reason or another they are not successful with increasing fees after the money off promotion has ran it's course. This then leads to resenting those clients, they are prioritised to the back of the queue in terms of importance and then they vote with their feet and tell all their colleagues! It's still a marketing activity to be able to increase those fees later.
So, if you do use discounts then my advice is to make sure the rest of your marketing and promotional messages articulate value and benefits, and have a plan in place to increase fees, or build into your plan that you will win some and lose some :)
-- www.maxxy.co.uk www.find-me-an-accountant.com Twitter:@maxinemaxxy
I tried
Discount on next year when you successfully introduce a new client. Total interest? Zero!
I honestly think that people neither expect nor want 'special offers' with regard to professional services.