Are You Not Charging Enough For Your Accounting Services? Find Out Here.
Mark Wickersham, best-selling author and Founder of Pricing Secrets, spends his time helping CPAs and accounting professionals like yourself make sure you are charging enough for your accounting services.
90% of accounting professionals do not, Mark believes. That’s going to change today.
In this episode of Growing Your Firm Podcast, David Cristello and Mark Wickersham dive into:
- How he quickly built up a client base using unconventional marketing methods
- Where to find profit boosters in your current offerings
- The 7 Steps to make sure you are charging enough for your accounting services
For Jetpack Workflow users, you can have Mark’s value based pricing checklist uploaded into your account (for free). Please contact support to have it uploaded into your account.
Mark Wickersham started out as a chartered accountant who moved over to accounting. After 8 years of working under a firm banner, he decided to hang out his own shingle in 1996 — excited for a new adventure thinking it would be like working for a firm.
For the first few months, it felt natural to him and was exciting.
But, then the debt started growing. His client base grew fast but was out of his control. Overhead keep climbing…
His first few years he spent learning from his mistakes. One of his big mistakes?
He got the wrong type of clients! He didn’t have clients who were profitable. He was shooting for quantity over quality at first and it hurt.
How Mark Built Up A Client Base Fast:
Mark grew to 200 clients and $200k in billings within the first 18 months…something unheard of for a first time entrepreneur. But, he was struggling to keep traction as the clients weren’t good clients. [200 clients at $200,000 is just $1000 per client per year…]
He was recording time sheets and working on getting the magical “70% chargeable rate” many accounting firms push for. Yet, it wasn’t working.
That’s when Mark found Michael Gerber and Chris Frederickson. What they taught was efficiency and marketing. Gerber taught: “Work on your business, not in it.” (something Mark struggled with). Frederickson taught him marketing strategies to attract the right type of clients. At that time, Mark only focused on ‘technical’ skills, not business-growth skills.
That’s when he picked up Frederickson’s marketing strategies:
1. Hire someone to do the administrative marketing pieces
2. Send 50 letters out each week
3. Follow up with a phonecall
With this strategy, Mark had 4 solid appt. each week with new prospects. That’s how he started attracting the clients he wanted.
DAVID’T TIP: For marketing, you need multiple touch points. Figure out the numbers as you go to how many times you need to “touch” a prospect before they agree to a meeting than to signing the dotted line.
90% Of Accounting Professionals Are Not Charging Enough For Accounting Services:
Are you not charging enough for your accounting services?
90% aren’t according to Mark.
Most just don’t know what to do and how to do it. Luckily, in this episode, Mark Wickersham lays out the golden path to pricing correctly when you are first starting out.
The first thing to look at is WHY? Why don’t accounting professionals charge enough?
We don’t like to hear “Oh, that’s too expensive.” It’s a punch to the gut. We, then, think all clients and prospects think like this and get into trouble undercharging.
What does Mark recommend to do in order to combat this instinct?
Look to get 25% of responses to be “That is too expensive.” When you stay around or below this percentage, you are charging the right amount. If not enough people are pushing back at your pricing…it’s too cheap.
On top of that, CPAs and accountants need to build their own confidence in getting paid what they’re worth. That just comes from practice over and over again.
Where To Find Profit Boosters In Your Current Offerings:
Firms are held back because, like Mark suffered through, they have too many clients. They look for as many clients as possible, even if the clients are worth little, and they don’t have anytime to nurture those clients. New clients get pushed onto the “list” and then forgotten.
You can make immediate changes right now and get results tomorrow.
Really, you can.
Look at your current offerings. Look at your current client list. I bet most of your clients don’t use all the services you provide. Some, because they don’t need the services. But others, THEY DON’T KNOW ALL YOUR SERVICES!
That’s right. They don’t know all the services provide. Even if you provide a mile-long list of services on your website, your clients are looking there for what they need. They expect you to show them what they need.
You need to approach them and offer your services. The best part: The worst thing the client will say is “No, thanks.” They aren’t going to fire you for offering to help them. No one does that.
Pricing Correctly Brings Windfall Profits:
The best way to make massive profits and be a value to your clients — offer them your services…then price correctly.
Let me get this off my chest: Fixed pricing is not the way to price. Value pricing is the most profitable way to price. Fixed pricing is just a form of hourly work. No. You must be value pricing to help your clients and help yourself.
Successful firms look at value to clients rather than the time you spent in your chair.
Here’s a quick way to start nailing value pricing:
- During tax planning, look at your client’s books
- Present to your client: “I can get you $100,000 in tax savings this year.”
- To save you this amount, I’d charge $15,000 as a commission for finding these savings. What do you think?”
See how, when presented correctly, this is a no-brainer solution for the client?
Rather than the old approach: “Yes, it will be $150 per hour for your tax planning.”
The former presents the value to the client first. The latter just screams at the client “THIS COSTS MONEY, MONEY, MONEY!” (No one likes this feeling).
The best thing to prepare yourself for value pricing is have the right system in place. Mark provides his 7 steps for nailing pricing and making sure you are charging enough for your accounting services:
- Recognize every customer pays a different price: Some clients pay more than others. Don’t have fixed rates.
- Give clients “Menu Pricing:” Provide them ‘packages’ for every service they buy so they can feel like they’re picking what they want rather than “shown” what they need. Big companies use it all the time e.g. your cable and phone service bundles. When you are thinking over a proposal, think about “where can I provide value where they will be more than happy to pay?” rather than just looking for more revenue streams.
- Learn great communication skills: You could say “sales.” Learn how to tout benefits over features.
- Come up with a price based on the value created: Present it to client in this way
- Think about “How can I make the price seem small and insignificant?”: When you present “$100,000 in tax savings” for just $15k, the fee seems small in comparison.
- Make sure you know “how do I get paid?”: Clients respect your work and advice when they pay for it
- Use POWER Strategies: Use guarantees with your work if you don’t perform up to task. The more risk you take off the clients plate, the better. Much like when lawyers say “no pay unless we win the case.”
These are just some of the ways you can start getting the comp you deserve and doing less work as a result. Less stress for you!
Which of the ‘7 Steps’ by Mark Wickersham do you find is the most important?