Does price or value matter most to your clients?

Paul Shrimpling of Remarkable Practice explains why price is inextricably linked to value and why your competitors' prices shouldn't dictate what you charge.

Continued...

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Comments
bookmarklee's picture

GREAT advice Paul

bookmarklee | | Permalink

A fine balance with the recent "lowest price wins the work" pieces aparing elsewhere on the site.

It's horses for courses of course. Many of the accountants who chase clients who are price concsious are  trying to build up a new practice or fill some spare capacity as quickly as they can. They may accept that the clients won in this way will not last too long, will not contribute much to the practice and may not, in the end, be worth the time and effort they consume.

I much prefer and would endorse your suggested approach above. It's more relevent to those looking at building sustainable practices and those who are looking to take clients from other accountants who are not providing the service that the client really wants.

Mark

keithlawrence's picture

Price or value?

keithlawrence | | Permalink

Great article Paul. I guess I've got to the stage where I cease to be surprised by business owners - including a fair number of accountants - who still think that business can be gained and retained purely on price. The irony is that most of us will normally base our buying decisions for most goods or services on a range of factors - but we tend to forget that when selling our own goods or services. Although price is one reasonably important factor it is by no means the most important  for most buyers and certainly not the only factor. After all if you're the cheapest but provide a rubbish quality of service you're unlikely to keep the customer long; equally if you provide an excellent service but charge too little for it you'll probably have an unsustainable business model. How many business owners I wonder will go only to the cheapest restaurants available?

I guess the critical point here - coming out of both your work and Mark's comments - is that you can gain a client through lowering your prices far enough but it doesn't give you a sustainable relationship or a sustainable business! I have a good friend  who found this out the hard way - filling his time with work sold at below cost kept him extremely busy but with very little to show for it... 

For now though I'm off to find that fantastic but cheap restaurant - while it's still in business!

Keith

 

Three cheers from a Yank

ejkless | | Permalink

Well said. I am constantly amazed by the number of professionals who whine that they have become, "a commodity." This thinking is ridiculous.

When encountered with this conversation in a group setting, I simply ask, "How many of you insist on buying the cheapest toilet paper?" Never does a hand go up. The point is clear, if toilet paper is not a commodity, how can any professional think that their knowledge is one. 

CRM and Value Pricing

malcolmrichards | | Permalink

Bang on as usual Paul, I see it in the Tax Investigation Insurance market all the time. The product offerings are now all much the same. The three dominant players ( in no particular order) CCH,Abbey and PFP all compete on price, my experience with my Accountant Clients is that it's not just price but 'people' deal with 'people'. As a variation on your coment re 'Pen pals',' look after your pen pals and turn them into mates'!

Look  forward to seeing you on the Conference circuit in the not to distant future.

paul shrimpling's picture

toilet paper tells a tale

paul shrimpling | | Permalink

I love your toilet paper analogy, thankyou. With your permission I'll use the metaphor next time I present on and around pricing.

 

Paul-- remarkable practice... inspires remarkable results