Value-based service: No one wants a tax return or a set of accounts
Do your clients only care about price and whether you submit their tax return before the end of January? Kevin Whitehouse believes they really want something more.
Value-based service surely just means accountants providing value to the client in a form of service. Isn’t that what you are already doing? Or to put it another way, it’s helping clients when they need it.
I don’t think this is really the problem. From what I have seen over the past 30 years, pretty much everyone in the profession is a caring, hard-working person who often goes over and beyond what the client expects - and not even charging for the extras. That is perhaps the first clue what is wrong.
We could put this value-based service into several categories: The obvious one is compliance. There is a need to complete a tax return and a set of accounts and submit to the various authorities. There are then more one-off tasks, such as CGT, R&D and other specialist services.
Then, you might offer some sort of forecasting and budgeting service. This might be annually or even quarterly. Not forgetting bookkeeping and payroll services. You might have also developed a service where you might meet once a month or once a quarter, and even offer some sort of part-time finance director role.
So, where is this new value-based service? I believe the value-based service hinges around the value proposition, and I’ve learned that you find this from answering one single question:
“Why should I, your ideal client, buy from you versus any other option, including doing nothing?”
By answering this, you understand what your client wants and you can package your services in such a way that it gives them something of value.
Let’s explore this further. Say you produce accounts and tax and you do this very efficiently. What does your client want? You might believe they want it cheap and done before the end of January?
First, cheap is subjective. What I think is inexpensive and what you think is cheap are two different things. If you’re not making enough money, working too hard in your practice, overworked at Christmas and in January, then the price you charge for your services will have a great deal to do with your own confidence and the way you think. That is a different challenge that should be fixed first.
But, is “cheap and done in January” really what your ideal client wants? Or, is the fact they get their records to you as late as possible and don’t want to pay you very much a clue that they have other problems?
Are they worried about other matters? Maybe they are poor at keeping records, maybe they are scared of owing HMRC, maybe they struggle making money themselves – maybe they have some phobia or fear.
What do they worry about? What keeps them awake at night?
It’s relatively easy to offer some sort of fancy value-based service at £5,000 a month to a profitable, energetic, entrepreneurial-type business owner, but what about the millions of people who leave all their compliance to the last minute? How can we help them with a “value-based service”?
It starts with talking to them. The problem is most in the profession don’t know the right questions to ask.
If you ask different questions to what you normally do, you’ll soon find most of your clients don’t actually want a tax return or set of accounts. What they really want is an outcome.
Your mission is to find out what their outcome needs should they engage your service.
Understand this and you stand a chance of changing the way you deliver your compliance. That will lead to the client benefiting as you help them achieve their outcome, and you will benefit by reducing your workload for last-minute deadlines.
When you start to understand what your client wants, you get closer to answering the question: “Why should I, your ideal client, buy from you versus any other option, including doing nothing?”
When you can answer this question, you will soon find your fees for your service could go up, or the last minute stresses go down, and if you work at this, you could achieve both.
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Kevin Whitehouse has run his accountancy firm Prime Entry since 1991 and is now also mentoring other accountants on how to run their practice with less stress, more profits and if they want, less time input....