Pricing is both a science and a dark art. When you understand the science behind how we take a decision, pricing becomes far more of a science than a dark art. In this article, I explore the science and reasoning behind the package system of pricing and why our pricing package names are so important to the decision-making process.
Our brain doesn’t want to think hard
Imagine going into a coffee shop for the first time being bombarded with all the different types of coffee available, Latte, Skinny Cappuccino, Flat White for example. Then when you think you have made your decision the Barista asks which bean you’d like and then full, semi or skimmed milk. Then when you have done that, what cake are you having?
Choosing your drink from one of the ubiquitous upmarket coffee chains is a great example of decision fatigue, and how our brain tries to avoid it. With all the choices available, your brain is forced out of automatic subconscious decision making, “I just wanted a coffee”, into conscious and slow thinking decision making “so which coffee do I really want?” This is why we so often just default to our favourite option when we go into an upmarket coffee chain. Our brain doesn’t want to have to spend a lot of energy thinking about which coffee to have. It mostly wants to take an automatic decision. Or as near to automatic as it can get.
Packages help your prospects' brains from thinking too hard.
It’s the same with your pricing. If you don’t bundle your compliance services into packages you are forcing your prospects to have to move into conscious but very slow decision making, rather than automatic, quick and effortless decision making in your subconscious brain. After all, you don’t want them to have to take a decision for whether the tax return is good value, and the year-end accounts are good value, and filing the confirmation statement is good value…. and so on. What you really want them to do is take one decision that they are going to ask you to do their compliance work for them, at a price point which represents good value for you.
But it’s not just what you put into your packages which matter. Or how much you are going to charge for each package. It’s also what you call them. We need to think of pricing package names to help our clients make an automatic and quick decision on what is the right package for them. Naming your services the popular convention of Bronze, Silver, and Gold does not make it easy for your target clients to make a decision. In these modern times of too much choice, the decision needs to be a simple one. If the decision isn’t simple, you are forcing your prospects to have to use slow, conscious decision making.
Finding the right pricing package names means basing them around your client personas
In our book, The Accountants Millionaires’ Club, Heather Townsend goes into great detail about our target clients and working out client personas for this target audience. This is a fictionalised representation of your ideal client and helps to bring them to life. (You can download a free copy at https://accountantsmillionaire.club/)
Once you have a client persona you then design a package around their needs and come up with a suitable name for each package. The name of your package will help your target client conjure up a picture of how you’ll help them and what’s in it for them. This is not about you, or all the bells and whistles that you can add. It’s a simple name that will help them make an easy decision.
Evolve, Adapt and Survive are the three package names that are used by Paul Miller at Cornish Accounting Solutions in Bodmin, Cornwall. These packages evoke a feeling around your business needs and point you in the right direction dependant on your own business journey.
DJCA Accounting has their “Contractor Lite for experienced contractors or freelancers” and their “Contractor Plus for first-time contractors who need peace of mind to help with IR35, taxes and personal finances.”
When it comes to helping your prospects take a quick decision to go with you, you first want to reduce the amount of decisions they need to take by packaging up your compliance services into one bundle. Then base each tier on a client persona. Only then can you choose pricing package names which help your prospects easily identify what level of service they need from your firm. The more automatic the decision making, the quicker and easier it will be for you to sign up new clients.
This blog post was originally published on the Accountant Millionaire's Club website.