Podcast
Summary
- Improving Profit Leads to More Options
- First Things, First: Increase Prices
- Increase Retention
- Increase the Quantity of Services Your Clients are Buying
Resources
- The Hidden, Simple Growth Lever in Your Firm
- What You Need to Know Before Pricing Accounting Services
- 12 Expert Tips to Create a Thriving Virtual Accounting Firm
Improving Profit Leads to More Options
Today, the founder and CEO of Jetpack Workflow, David Cristello is back with another solo cast to cover how the current job market is affecting firms.
You know about the great resignation and employee turnover and ways to improve it. But it’s essential to look at it from the angle of why it’s happening.
David believes it’s because employment opportunity is sky high and the benchmarks for compensation are going through the roof.
It’s putting pressure on firms to find ways to automate and become more efficient. It’s also forcing firms to figure out how to afford it and still grow.
To help, the rest of the podcast will cover a few ways to help your firm grow profit. While it won’t solve all of your problems caused by resignations, it will allow you to be more flexible when searching for solutions.
First Things, First: Increase Prices
First, you need to do a price benchmark of all of your services.
Take time to do a deep dive into your prices. Ask yourself:
- What kind of value do you bring to the market?
- What are your competitors offering and what value are they bringing at what price point?
Look at the full market survey. You can also survey your clients by running something called a price sensitivity score which covers:
- What price is too much and would cause them to walk away
- The sweet spot price
- What price is so cheap they’ll questions quality
Because most firms don’t increase prices every year, when you come to a final number, go a little higher. This is because you’ll likely spend 3 to 5 years before you raise prices again and you want these new prices to be sustainable.
If you don’t want to do this, you need to create a system for raising prices. Try doing it yearly at a set percentage increase and keep your clients in the know.
Do what works best for you and don’t wait – it’s a huge opportunity.
Get everything you need to manage projects and meet deadlines.
Increase Retention
If you are having any type of retention issues with your clients, you need to dig in and protect the revenue.
Sit down with your clients and ask what they like about the firm and what they’d like to see improved. You need to understand their feedback, their goals, and what they need from your firm. This will help you get a handle on retention.
Retention is important because once a client is on board, you don’t have to worry about acquisition costs again. It’s a great way to retain revenue.
Increase the Quantity of Services Your Clients are Buying
If you haven’t mapped out your services and looked at the wallet share per client, you need to. Many firms offer four or five services. Figure out which clients are buying which services and try to expand.
You can’t leave it up to your initial sale. If you are doing yearly check-ins, use that as an opportunity to mention your other services to see if you may be able to help. For example, if they mention they are hiring, let them know you offer payroll services.
Ask your clients what they are struggling with and if you have a service that can help, let them know. There are plenty of ways to remind your clients of the services you offer.
If they are already maxing out on your services, try offering more advisory.
Wrapping Up
If you’re looking for ways to increase profit, try increasing your prices, retention, and number of services your clients use.
More money in the bank gives you more opportunities to solve some of the leading problems in your industry.
Be sure to listen to the full solo cast above for more information!
