In a recent webinar with Bill.com, I was excited to share my thoughts on how our profession can use principles of pricing to capture value in your firm. This article will summarize some of the principles I shared in that webinar, and the next steps you can follow to begin capturing more value with your clients.
All Value Capture Begins with the Client
Where do you find more value? It will always begin with the client. Firms must become more collaborative with clients in their pricing to unlock the value the client desires from their firm. And it can be surprising to the firm owner to realize that clients don’t often know what they value. Clients can typically tell a firm what they need, but they struggle to tell the firm what they want. The wants are where you’ll find the value in the client relationship. Starting every client relationship with a ‘value conversation’ is a place to ask future-oriented questions of the client, and hear them describe the things they want. ‘Future-oriented’ means questions like “What do you hope to become in 2 years?” or “Can you describe the role you’ll be filling in your company in 2 to 3 years?” These questions put the client in a different perspective in their mind, and they begin to speak of their aspirations, or hopes for the future. That is when you’ll hear their wants come out (which you can price).
Your Services do not have Inherent Value
This can be a shock to learn that services do not inherently have value. What is transformative is to learn that your clients (the humans) are the ones that place value on a particular service. Services don’t have value, but your clients attach value to the services you provide. This is empowering because it means you can explore value with each and every client and offer them a price that reflects the value they perceive in what you do for them. You just have to do the work to explore value with your client. This takes time and a commitment to being in the life of the client in a deep and real way. When the client learns to trust you in this way, you can really drive amazing transformation in their life and be paid well to be on that journey with them.
Value Pricing is a Slower Model of Client Alignment
It’s a struggle for fast moving business models to add slow, methodical value pricing processes into firms. Firms are inherently fast models. Tax season is all about speed and efficiency, and this is not a situation where ‘value searching’ typically grows in a healthy way. It’s hard for firm owners to perceive the changes that are necessary to migrate to a value pricing business model. But fast models can be changed over time. And the 2 to 3 year journey it takes to do this is worth the rest of the firm owner’s future in working in a slower, more enjoyable, higher priced model. Advisory models are inherently slow, so it’s often necessary to take speed out of the equation in firm growth if you want to transition to an advisory model.
What is one way to reduce the speed of a firm’s business model? With a process called Client Onboarding. Client Onboarding does the deep work of aligning clients’ wants with the firm’s purpose, and to make sure they are aligned in the value desired with the value being offered. Client alignment is paramount to value pricing. As they say, “you can’t value price the wrong client.” In other words, you can try to implement value pricing in your firm all you want - but if you have the wrong clients (i.e. they are not aligned), then it just won’t work. Slower firm models lend themselves to deep conversations and trust, two components that are necessary to value price a client with success.
One Thing to Always Remember
Are you ready to take the leap into value pricing? Always remember your goal is not about how much work you get done in a certain number of hours, but how you are delivering deeper levels of value to your clients.