Business Strategy for CPA's 125 Value and Segmented Pricing for CPAs with Pricing Expert Mark Stiving, PhD
Most CPAs struggle with pricing - some have moved to flat-rate or subscription pricing, and some still bill by the hour.
What they often struggle to understand is the full depth of the value they offer to their clients, and because they don’t fully understand value, they are leaving Everest Sized Mountains of Money on the table,
which means they have to work a lot harder to compensate for the missed opportunity.
Today’s guest is Mark Stiving the pricing expert behind impactpricing.com.
What we cover:
How to shift to flat-rate pricing when you have had a client whom you have billed by the hour:
Give them Menu Pricing with 3 packages: Good, Better, Best.
Put last year’s average monthly bill between the Good and Better package
How do you have a value conversation with your clients?
You can’t simply ask, what is the value? Instead you must work together with your client to discover the value of your work together. You might ask...
- If we can get you this result, what would result from that?
- If we can move from a 7 to an 8, what would happen?
- What’s it worth if you had that result, of ?
The quantitative value takes some digging to get to, but if you ask the right questions, you can get there.
Discovering value is a two-way street:
It’s about trying to discover how much value we are delivering to that client
- You as a vendor have no idea how much value your customer is going to get from your product
- The customer doesn’t know your product and has no idea how much value they are going to get from it
- Both of you work together to understand the value it will provide, and the client will receive.
Remember:
Before customers buy, they are buying based on perceived value.
After working together, they continue to buy based on actual value.
Once we have a customer, our job is to make sure they get real value, and KNOW they got real value.
To communicate hidden value, consider having a one-page write up
- “Let me tell you what I did yesterday”
- People with these problems often face these issues
- I solved this for you
- If you want to look more into it, here is more information
How to price by segment:
“I charge people in this industry this amount”
Start with what you price now, and examine your client roster to see if there is an industry that gets significan value from that service, compared to the others, and then price that segment above your basic rate.
Stay away from complexity!
Keep price segmentation simple by charging businesses in a certain industry XX% more than the basic service.
Think about where the low hanging fruit it, gain from that, and then go on to the next segment
If a CPA has the ability to act as a Trusted Advisor, they can have an initial conversation to get the ball rolling.
Understanding how to do pricing well is involved, so start with industries that are not in a super-competitive market and use cost+ pricing.
The Will I, Won’t I, or Which One? Questions:
Will I buy, won’t I buy? – think about popcorn in a theatre. You ask yourself first, will I or won’t I buy? You are not asking “Which theatre will I buy popcorn from?”
When people make a Will I decision, they are not as price sensitive, because options are often limited.
Start small. Start with value-pricing for your own company, and make it work first in your own business. Then learn to have value conversations with your clients, and then learn to coach your clients on having value conversations with their clients.
There’s a phenomenal opportunity for CPAs to help their clients become more profitable, you will reduce turnover, your work becomes more impactful and fulfilling, and your work becomes easier.
Connect with Mark:
Website: https://www.impactpricing.com/
Free 5-day email course - Better Pricing Strategies for CPAs
Want some help in your CPA firm, but not sure where to start?
Schedule a free discovery call with me:
https://calendly.com/geraldinecarter/15min
Want to find out what options you might have for working together?