Fee rates: Lay your cards on the table
Many accountants tell me that they don’t get enough business through their website. There could be a variety of reasons for this of course. Let us focus on the mindset of those people simply searching online for a new accountant. This is quite different to those who have been recommended to you or who have met you and are looking for your contact details etc.
As I suggested in my last article (What do you want, client-wise, in 2016?) there are various ways in which you could distinguish the sort of clients you would like to engage. Some will be new into business and will have had no previous accountant, others will have failed to cope by themselves and others will have been disappointed by one or more previous accountants.
The majority of these prospective clients will want to know what it will cost them to engage a new accountant. And, these days, many accountants’ websites will provide a good idea of the fees they seek to earn for doing certain common types of recurring compliance work. Does yours?
You may feel that it’s just not possible to provide any such guidelines or that there are too many risks involved in doing so. Maybe you’re right. However, the simply fact is that so many of your competitors manage to do this. And I would bet that they are winning more work through their website than you are.
Try to imagine what it is like to be the sort of client you are keen to attract. Or maybe you’d find it easier to imagine simply looking to find an adviser online to assist you with regular legal documents every year. If you don’t have any good referrals or recommendations, how do you choose? Invariably ‘cost is one of the factors that will invariably be considered.
It’s just not enough to say nothing or to make those traditional assertions such as to promise:
- A cost-efficient quality service
- No surprise fees; or
- A full choice of fee and payment plans
If you don’t believe me then cut and paste a sentence about fees from your website, add quotes at the start and end, and then submit it to Google. The search engine will often reveal that your proposition is no different to many, many other accountants.
If you are getting as many new clients as you want, there is no need to change your strategy. On the other hand, being more upfront about your fees could lead to more prospective clients getting in touch.
Some accountants would argue this approach could put off prospective clients who don’t want to pay your minimum fees. Another view is that you shouldn’t talk about fee rates until you have shown the value you will provide in return. I’m unconvinced. I’m all for saving the time that can so easily be wasted with prospects who are never going to pay the fees you want to earn for the work you do.
An alternative approach is to offer prospects the chance to request a quotation by supplying some basic information via a form on your website. I suspect that in most cases this leads simply to a discussion or meeting and that a quotation only follows thereafter.
Many firms’ websites now include a menu of prices for completing basic tax returns and the extras for each supplementary page (together with a caveat that additional fees would be quoted and charged if the client’s records were a mess – or words to that effect). There may be further charges for self employed or company accounts, for bookkeeping, for VAT returns, for operating a payroll etc.
Some accountants, when pressed to reduce their quoted fees, agree to do so, but only on condition that the client confirms which elements of the service offering they will not require.
Essentially you have four options when it comes to quoting fees on your website:
- Commoditise each service and quote typical prices so that those clients who take longer than average are balanced by those that take less time than average (the menu approach outlined above);
- Give indicative prices or price bands but make clear that each case depends on exactly what is required in order to provide the desired outcome in individual cases (a variation on the menu approach);
- Charge a monthly retainer (varied by client type) intended to build up to an annual fee that covers all recurring compliance work and, typically, includes routine email/phone enquiries;
- Not to mention your fee rates – still the most common approach adopted by accountants.
The advantage of the first route is that you avoid spending time negotiating fees. The corollary is that you could spend additional time and effort before the work is agreed but you have no facility to reflect this hassle factor in an increased fee. This approach also denies you the facility to highlight the value side of your proposition beforehand. Everything is just down to price. Some of the firms that do this are in a race to the bottom; others believe they can genuinely reduce the typical fees charged if clients use a preferred supplier of cloud bookkeeping.
Historically it was not path many accountants were keen to follow. But an increasing number of firms are adopting pricing models that let them do this. I assume that the benefits must outweigh the disadvantages. Or are all the advocates simply naïve? I note that KPMG and PwC make clear their minimum fees for smaller clients. I am sure that doing this helps reduce the time wasted on people who are only interested in paying much lower fees.
The second and third approaches listed above enable you to maximise your fees and to take account of all surrounding factors including the amount of time and effort it has taken to win the piece of work in question.
The last approach is the most common. The website may simply make reference to agreeing fixed fees and to a promise of “no surprise fees”.
To me, adopting the stance of not quoting fees on your website is akin to the expensive clothes shops that displays garments in the window, but without price tags attached. If you go into the shop you know it’s going to be expensive. Do you want to give a similar impression about your accountancy practice? Bear in mind that many people avoid crossing the threshold of such shops as they don’t want to get pressured into paying what we anticipate will be high prices.
Might prospective clients who find your website reach a similar conclusion?
Some might say that those accountants who make no reference to fees on their website don’t have a clear target audience. More likely it hasn’t occurred to them – or perhaps they have enough clients not to need to think about it.
What’s your approach?
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